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Advocates
  • Rajiv Bhalla
  • V. K. Jain
  • Sr. Advocate with R. K. Sharma
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  • V.M Jain, J.
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citation codes
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Advocates
  • Rajiv Bhalla
  • V. K. Jain
  • Sr. Advocate with R. K. Sharma
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  • V.M Jain, J.
Acts
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Smart Summary

Judgment Summary — Civil Revision Nos. 2534 of 1999 & 5618 of 1999 (V. M. Jain, J.)

Factual and Procedural Background

This judgment disposes of two civil revisions between the same parties concerning the same industrial shed: Civil Revision 2534 of 1999 and Civil Revision 5618 of 1999.

Brief factual matrix (as set out in the opinion): M/s. S.S. Fasteners (plaintiff / licensee) occupied part of Industrial Shed No. 3121 in Industrial Area, Chandigarh. A licence deed dated 2.1.1996 granted approximately 34' × 15' of the shed to M/s. S.S. Fasteners for the period 1.1.1996 to 31.12.1996, with a clause referring disputes to a sole arbitrator. On 24.1.1997 the licensor (through Sat Paul Verma, general attorney of M/s. Allwyn Poly Packs Pvt. Ltd.) served notice revoking the licence. The licensor invoked the arbitration clause; the Arbitrator proceeded ex parte and passed an award dated 28.7.1997 directing delivery of possession of the licensed portion and payment of damages for unauthorized occupation after revocation.

Procedural history:

  • M/s. S.S. Fasteners filed a civil suit for permanent injunction and an application for ad interim injunction under Order 39 Rules 1 & 2 CPC. The trial Court confirmed an ad interim injunction on 24.1.1998 (having earlier granted one on 4.3.1997).
  • The defendant (owner/licensor) appealed and the District Judge allowed the appeal and dismissed the ad interim injunction application on 10.4.1999 (this order is challenged in Civil Revision 2534 of 1999).
  • The owners filed execution proceedings under Section 36 of the Arbitration and Conciliation Act, 1996 (enforcement of the award). The Additional District Judge held the award executable and ordered warrants of possession and attachment on 13.10.1999 (this order is challenged in Civil Revision 5618 of 1999).
  • Both revisions were heard together because they concern the same parties and property.

Legal Issues Presented

  1. Whether the ex parte arbitral Award dated 28.7.1997 was executable under Section 36 of the Arbitration and Conciliation Act, 1996, in light of the licensee/tenant contention and the Rent Act provisions?
  2. Whether the plaintiff (M/s. S.S. Fasteners) was entitled to an ad interim injunction in respect of the portion covered by the licence and arbitral Award?
  3. Whether the plaintiff was entitled to an ad interim injunction in respect of the remaining portion of the industrial shed (not covered by the licence and arbitral Award) pending disposal of the suit?

Arguments of the Parties

Petitioners / Plaintiff (M/s. S.S. Fasteners and Ashok Sachdeva)

  • Contended that the arbitral Award was not executable because they were tenants of the industrial shed and the Rent Act provisions applied; reliance placed on Bahadur Singh v. Muni Subrat Dass (1969) to support non-executability where Rent Act protections apply.
  • In relation to ad interim relief, asserted they were in possession of the remaining portion of the shed and therefore entitled to an injunction protecting that possession pending suit disposal.
  • In execution proceedings, raised preliminary objections that the Arbitrator lacked jurisdiction and that the award could not be enforced against them in execution.

Respondents / Owners (M/s. Allwyn Poly Packs Pvt. Ltd. through Sat Paul Verma)

  • Emphasised that the licence deed of 2.1.1996 contained an arbitration clause and that the licensee had been served with notice in arbitration but failed to contest; the Arbitrator proceeded ex parte and passed the award which was not challenged under Section 34 of the 1996 Act.
  • Argued that the Award had attained finality because no Section 34 challenge was filed and therefore, under Section 36 of the 1996 Act, it was enforceable as a decree; reliance placed on authorities including Madan Lal v. Sunder Lal, Bhawarlal Bhandari v. Universal Heavy Mechanical Lifting Enterprises and Vasudev Bhanjihhai Modi v. Rajabhai Abdul Rehman to support non-interference by the executing court.
  • Maintained that the plaintiff could not claim to be a tenant for the licensed portion once the Arbitrator found they were licensees and that merits of jurisdiction should have been raised in arbitration.
  • Argued against the grant of injunction for the portion claimed as owner’s property, relying on authorities to show injunction will not protect a trespasser or unlawful possessor.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Bahadur Singh v. Muni Subrat Dass (1969 (1) SCWR 51) That objections to the validity of an award cannot be entertained in execution proceedings and questions regarding validity must be determined by the Court in which the award was filed; also held that Rent Act could make a decree a nullity where the court passed a decree without satisfying statutory grounds for eviction. The Court held this authority was of no help to the petitioners on the facts here because in the present case the Arbitrator had entered upon arbitration, given notice, and the appellants did not contest; thus the special circumstances in Bahadur Singh (decree passed without grounds being examined under the Rent Act) did not exist here.
Madan Lal v. Sunder Lal (AIR 1967 SC 1233) Interpreting Section 30 of the Arbitration Act, 1940: if a party wants an award set aside on grounds in section 30 it must apply within the specified period; failure to do so precludes setting aside on those grounds. Cited to support that an award not challenged within the statutory period becomes final and cannot be set aside later; used to sustain enforceability of the arbitral Award dated 28.7.1997.
Bhawarlal Bhandari v. Universal Heavy Mechanical Lifting Enterprises (1999 (1) SCC 558) Authority confirming that where notice is served and objections under the relevant arbitration provision are not taken in time, the executing court cannot go behind the decree except where decree is a nullity for want of jurisdiction on the face of the record. Relied upon to show that the executing court properly refused to permit re-agitation of matters which should have been raised under Section 34, and that the award had attained the status of a decree enforceable under Section 36 of the 1996 Act.
Vasudev Bhanjihhai Modi v. Rajabhai Abdul Rehman (1970 (1) SCC 670) Executing court cannot go behind the decree; until set aside on appeal or revision, a decree is binding even if erroneous; objections requiring trial examination cannot be entertained in execution. Applied as precedent that the executing Court was correct to enforce the award as a decree and not to re-open jurisdictional and factual questions which could or should have been raised in the arbitration or under Section 34.
Harike Rice Mills v. State of Punjab (1998 (1) PLJ 395) Even if appointment of an arbitrator is claimed to be invalid, validity must be decided by the court before which the validity of the award is challenged; an unsuccessful party cannot challenge the arbitrator's rejection of a challenge to appointment in a court before award is made. Applied to support the proposition that a separate suit challenging the validity of the Award (before invoking Section 34) would prima facie not be maintainable and thus injunction challenging that award was not maintainable for the portion subject to arbitration.
Premji Ratansey Shall v. Union of India (1994 (5) SCC 547) Injunction is discretionary and equitable; injunction will not be granted against the true owner and is not automatic; possession rights must be established to obtain injunction. The Court noted the principle but found it not directly applicable on present facts because it is yet to be determined whether the plaintiff's possession of the remaining portion is lawful; therefore injunction could not be refused at this stage solely on the ground that it might be a trespasser.
DTTDC v. D.R. Mehara & Sons (AIR 1996 Delhi 391) Authority cited by respondent relating to injunctions and possession disputes (as relied on below). Cited by respondent below; the Court found that the specific law and facts of that authority did not apply to the present case.
AIR 1996 Delhi 351 Case where a licensee continuing in possession after expiry of licence was held not entitled to injunction against true owner. The Court held this authority inapplicable because, in the present case, it is not admitted that the plaintiff is a licensee of the remaining portion; the factual matrix differs.
Hindustan Aeronautics Ltd. v. Ajit Prasad Tarway ((1972) 3 SCC 195 : AIR 1973 SC 76) Authority concerning interference by revisional court with an appellate court's decision (relied upon by respondent to argue non-interference). The Court considered it but held the authority did not preclude interference here because the District Judge had failed to consider the injunction claim in respect of the remaining portion of the property; therefore interference in revision was justified.

Court's Reasoning and Analysis

The Court conducted a step-by-step analysis limited to the record and legal authorities discussed in the opinion. The reasoning, in summary, was:

  1. The arbitral Award dated 28.7.1997 had been passed after the Arbitrator issued notice and the licensee failed to contest the arbitration proceedings; the Award was sent to the licensee and was not challenged under Section 34 of the Arbitration and Conciliation Act, 1996 within the period provided.
  2. Pursuant to Section 36 of the 1996 Act, once the time for a Section 34 challenge has expired (or such an application has been refused), the Award is enforceable under the Code of Civil Procedure in the same manner as a court decree. The Court quoted Section 36 and applied it to hold that the Award had assumed the position of a decree.
  3. The Court relied on established authorities (including Madan Lal, Vasudev Modi and Bhawarlal Bhandari) to reiterate that an executing court cannot ordinarily go behind a decree or re-open matters which should have been raised in the proceedings that produced the decree (or by a timely Section 34 challenge) unless the decree is a nullity on the face of the record due to inherent lack of jurisdiction.
  4. Because the Arbitrator had entered upon arbitration, issued notice and proceeded to decide after the licensee failed to appear or contest, the arbitrator's finding that the occupants of the licensed portion were licensees and that the licence had expired/revoked became final between the parties; accordingly that finding could not be relitigated in execution proceedings.
  5. On this basis the Court found no merit in Civil Revision 5618 of 1999 (challenge to executing Court's order) and upheld the executing court's conclusion that the Award was executable and enforceable (including issuance of warrants of possession and attachment for damages).
  6. Turning to the injunction applications (Civil Revision 2534 of 1999), the Court separated the dispute into two distinct portions: (a) the licensed portion expressly covered by the licence deed and the arbitrator's Award; and (b) the remaining portion of the industrial shed not covered by the licence and not the subject of the arbitration award.
  7. For the licensed portion, the Court held that since the Award had become final and enforceable, there was no basis to grant ad interim injunction protecting the plaintiff's possession of that portion.
  8. For the remaining portion, the Court noted the plaintiff's admitted possession, local commissioner's report confirming possession, and that the factual circumstances under which the plaintiff acquired possession of that portion were yet to be determined. The Court applied equitable principles governing interim injunctions (citing Premji Ratansey) and concluded that, at this interlocutory stage, the plaintiff should not be dispossessed of that portion except in due course of law.
  9. The Court further relied on statutory provisions of the 1996 Act (Section 16 — competence-competence principle; Section 5 — limited judicial intervention) to underscore that jurisdictional pleas regarding the arbitration agreement should have been raised before the arbitral tribunal and that judicial intervention is circumscribed by the Act.
  10. Finally, the Court considered but rejected the respondents' submission that revision should not disturb the appellate decision, finding that the District Judge had failed to consider the claim for injunction in respect of the remaining portion and had dismissed the injunction application in its entirety on the ground that the plaintiff was a licensee; that approach was incorrect when the plaintiff's possession of the remaining portion had not been decided.

Holding and Implications

Holdings:

  • Civil Revision 5618 of 1999: DISMISSED. The Court found no fault with the executing court's order dated 13.10.1999 holding the arbitral Award executable; there was no order as to costs.
  • Civil Revision 2534 of 1999: PARTLY DISMISSED AND PARTLY ALLOWED.
    • As to the portion which was the subject-matter of the licence deed dated 2.1.1996 and the arbitral Award dated 28.7.1997 — the plaintiff is not entitled to any ad interim injunction (the award is final and enforceable).
    • As to the remaining portion of the industrial shed (not the subject of the licence deed or arbitral Award) — the plaintiff shall not be dispossessed during the pendency of the suit except in due course of law; the defendant is restrained from interfering with the plaintiff's possession of that portion until disposal of the suit. No order as to costs.

Implications:

  • Direct effect on the parties: The arbitral Award stands enforced like a decree for the licensed portion (execution and warrants were properly ordered); the plaintiff cannot obtain interlocutory protection for that portion. However, the plaintiff keeps interim protection over the remaining portion pending determination of rights in the suit.
  • The Court applied established principles that an arbitral award not timely challenged under the statute attains finality and becomes enforceable under Section 36 of the 1996 Act; executing courts will not re-open matters properly determinable in arbitration or by a timely Section 34 challenge, except where the decree/award is a nullity on the face of the record.
  • The opinion does not purport to lay down any novel precedent; it applies existing principles (statutory provisions and case law) to the facts before it and resolves the two revisions accordingly.
Result: Revision 5618/1999 dismissed; Revision 2534/1999 partly dismissed and partly allowed (injunction refused for the licensed portion; injunction granted to preserve possession of the remaining portion pending suit). No order as to costs.
Show full summary ...

    S.S Fasteners v. Satya Paul Verma .

    V.M Jain, J.:— This judgment shall dispose of Civil Revision 2534 of 1999 and Civil Revision 5618 of 1999 between the same parties and concerning same property.

    2. Civil Revision 2534 of 1999 is against the judgment dated 10.4.1999 passed by the District Judge (in appeal) setting aside the order dated 24.1.1998 passed by the trial Court dismissing the ad interim injunction application of the plaintiff, while the other Civil Revision 5618 of 1999 is against the order dated 13.10.1999 passed by the Additional District Judge holding that the Award given by the Arbitrator was executable and ordering the issuance of warrants of possession qua the licensed portion of the property in question and also issuing warrants of attachment for the recovery of the Award amount.

    3. The facts of Civil Revision 2534 of 1999, in brief, are that M/s. S.S Fasteners (plaintiff) filed a suit against Sat Paul Verma (defendant) for permanent injunction restraining him from interfering in the peaceful possession of the plaintiff over the tenanted premises and from dispossessing it therefrom except in due course of law. In the said suit, it was alleged that it had taken the entire disputed premises on lease from the defendant on a monthly rent of Rs. 2900/- in the year 1987 and since then, it was in possession of the premises and the plaintiff had installed machinery for the manufacture of machine screws, it was alleged that in due course, rent was increased to Rs. 6450/- per month and that the rent was paid upto December, 1996. It was further alleged that on 24.1.1997, the defendant told the plaintiff to vacate the disputed premises, failing which he would be evicted by use of force. Accordingly, the plaintiff filed a suit for permanent injunction restraining the defendant from dispossessing him except in due course of law and further restraining from interfering in the peaceful possession of the plaintiff over the suit property. Along with the suit, the plaintiff had also filed an application for the grant of ad interim injunction under Order 39 Rules 1 and 2, CPC. The suit and the application were contested by the defendant by filing written statement/reply, denying that the entire premises had been taken on lease as alleged. On the other hand, it was pleaded that only a part of the premises (measuring 34′ × 15′) was occupied by the plaintiff as a licensee under the defendant and that initially the licence fee was Rs. 2900/- per month, which was subsequently increased to Rs. 77.400/- per year. It was alleged that the said licence expired on 31.12.1996 On the expiry of the period of licence, it was alleged that the defendant had served a notice on the plaintiff and had revoked the licence. It was alleged that a few days after 24.1.1997 when the defendant had gone to the disputed premises, he found that the plaintiff had trespassed into the remaining part of the shed by breaking open its lock and accordingly the defendant reported the matter to the police. It was alleged that since the plaintiff was only a licensee and the period of licence had expired and even other wise since the licence had been revoked, the plaintiff was not entitled to the decree for permanent injunction or for the grant of ad interim injunction. The learned trial Court, after hearing both the sides and perusing the record, vide order dated 24.1.1998 confirmed the ad interim injunction granted on 4.3.1997 till the disposal of the suit. Aggrieved against the said order, the defendant tiled an appeal before the District Judge. The learned District Judge, after hearing both the sides, accepted the appeal and dismissed the ad interim injunction application of the plaintiff, vide judgment dated 10.4.1999 Aggrieved against this judgment of the District Judge, the plaintiff tiled Civil Revision 2534 of 1999 in this Court. Notice of motion was issued.

    4. The facts of Civil Revision 5618 of 1999, in brief are that the premises in question was owned by M/s. Allwyn Poly Packs Pvt. Ltd. through its general attorney Sat Paul Verma, who entered into an agreement with M/s. S.S Fasteners through Ashok Sachdeva, its partner, and gave a portion of the shed on licence basis against licence fee. In the licence deed, there was a clause that in case of dispute, the matter shall be referred to the sole Arbitrator. On 24.1.1997, the owners served a notice to the licensee and asked him to vacate the premises and the licensee having failed to vacate the premises, the matter was referred to the sale Arbitrator, who issued notice to the licensee but nobody appeared to contest and instead the Arbitrator was advised not to enter into Arbitration. Since no one had put in appearance on behalf of the licensee before the Arbitrator, the Arbitrator held the proceedings ex parte against the licensee and passed an ex parte Award on 28.7.1997 directing the licensee to hand over the possession and also to pay compensation for the unauthorised use of the area in its possession after the revocation of the licence. Even after the Award dated 28.7.1997 was passed by the Arbitrator, no action was taken by the licensee to get the said Award set aside under Section 34 of the Arbitration and Reconciliation Act. 1996 (hereinafter referred to as the Act of 1996). Subsequently, on 15.6.1998, the owners filed execution petition before the civil Court for execution of the ex parte Award dated 28.7.1997 In the said execution proceedings, the licensee filed written reply, taking up preliminary objection to the effect that the Arbitrator had no jurisdiction to pass the Award against the licensee in view of the provisions of the East Punjab Urban Rent Restriction Act (hereinafter referred to as the Rent Act) which were applicable to the UT of Chandigarh. The learned Additional District Judge (the executing Court) after hearing both the sides, rejected the claim of the licensee and held that the Award given by the Arbitrator was executable and accordingly ordered issuance of warrants of possession qua the licensed portion of the premises in question and also issued warrants of attachment for the recovery of the amount of damages, vide order dated 13.10.1999 Aggrieved against this order of the executing Court, the licensee Civil Revision 5618 of 1999 in this Court. Notice of motion was issued.

    5. I have heard learned Counsel for the parties in both these civil revisions and have gone through the record carefully.

    6. Since both the revisions arise between the same parties and pertain to the same property, both the revisions are being disposed of by the same judgment.

    7. The premises in dispute is Industrial Shed No. 3121. Industrial Area. Ph. II, Chandigarh, along with its building constructed thereon. As per licence deed dated 2.1.1996 (the last licence deed which was executed between the parties), Sat Paul Verma, general attorney of M/s. Allwyn Poly Packs Pvt. Ltd. (owners) had given approximately 34′ × 15′, being the portion of the said industrial shed adjoining of its wall, for use on licence basis to M/s. S.S Fasteners through its partner Ashok Sachdeva, on various terms and conditions. One of the terms was that the licence was for a fixed period of 12 months w.e.f 1.1.1996 to 31.12.1996 and the licensee had agreed to pay compensation of Rs. 77.400 - in the form of licence fee for the said period of one year payable either in lumpsum or in monthly instalments and the licensee was permitted to use the premises for which licence had been granted and the licensor was authorised to revoke the licence. It was further agreed between the partres that in case of any dispute, the matter shall be referred to the sole Arbitration of Sh. P.D Mongia and its decision shall be binding upon both the parties. This licence deed was signed by Sat Paul Verma on behalf of the licensor and Ashok Sachdeva on behalf of the licensee. As per the said licence deed, the period of licence shall expire on 31.12.1996 and in case of any dispute, the matter shall be referred to the sole arbitration in view of the arbitration clause. Since the licensee did not vacate the premises after 31.12.1996 inspite of notice dated 24.1.1997 having served upon it. Sat Paul Verma, general attorney of M/s. Allwyn Poly Packs Pvt. Ltd. invoked the arbitration clause and referred the matter to the sole arbitrator namely Sh. P.D Mongia. On receipt of the reference, along with the statement of claim and other documents, the Arbitrator sent notice of the statement of claim to the licensee, in the arbitration proceedings and in reply to the notice, the licensee appeared before the Arbitrator and instead of replying the claim petition, the licensee told the Arbitrator not to enter upon the arbitration. However, no reply to the claim petition was filed by the licensee and also did not appear before the Arbitrator, inspite of subsequent notices and accordingly the licensee was preceded against ex-parte. Thereafter, the owners produced evidence before the Arbitrator in support of their claim. The Arbitrator, vide its Award dated 28.1.1997, held that M/s. S.S Fasteners through Ashok Sachdeva, its partner, was the licensee in respect of the area DEGH adjoining the office wall, as depicted in the site plan produced before him, by virtue of the licence deed executed between the parties. It was further held that the said portion was given on lease for use of the area in question and the period of licence was one year from 1.1.1996 to 31.12.1996 It was further held that the owners had validly revoked the licence through notice dated 24.1.1997 and after the revocation of the licence, the occupation thereof by the licensee was illegal and unauthorised. Accordingly. M/s. S.S Fasteners through its partner Ashok Sachdeva, was directed to vacate the area in question and deliver vacant possession to the owners and to pay damages w.e.f 1.1.1997 for illegal and unauthorised occupation of the licensed area till the delivery of the vacant possession. After the Arbitrator had given the Award, the Arbitrator sent the said Award to M/s. S.S Fasteners for necessary compliance. On receipt of the ex parte Award passed by the Arbitrator, M/s. S.S Fasteners through its partner Ashok Sachdeva filed the suit for permanent injunction referred to above and along with the said suit, application under Order 39 Rules 1 and 2, CPC, was also filed for the grant of ad interim injunction. Since no application was filed by M/s. S.S Fasteners before the civil Court under Section 34 of the 1996 Act, for setting aside the arbitration Award dated 28.7.1997 within the specified period, M/s Allwyn Roly Packs Pvt. Ltd. through its general attorney Sat Paul Verma filed a petition under Section 36 of the Act of 1996 for enforcement of the said Award dated 28.7.1997 In reply to the notice. M/s. S.S Fasteners and Ashok Sachdeva, its partner, filed written reply dated 16.11.1998, alleging therein that the Award passed by the Arbitrator was illegal and without jurisdiction and that in view of the provisions of the Rent Act applicable to the UT of Chandigarh, no landlord of a building could evict a tenant except on the grounds given under Section 13 of the said Act and as such the Award given by the Arbitrator could not be executed.

    8. So far as the validity of the order dated 13.10.1999 passed by the Additional District Judge, which is the subject-matter of Civil Revision 5618 of 1999 is concerned, it was submitted before me by learned Counsel for the petitioners that the Award in question dated 28.7.197 given by the Arbitrator was not executable, considering that the petitioners were tenants over the industrial shed in question. Reliance was placed on Bahadur Singh v. Muni Subrat Dass, 1969 (1) SCWR 51. On the other hand, learned Counsel for the respondents submitted before me that admittedly the licence deed dated 2.1.1996 was executed between the parties and in the said licence deed, there was an arbitration clause. It was submitted that since the licensee had not vacated the premises after the expiry of the licensed period and even after the licence was revoked vide notice dated 24.1.1997, M/s. Allwyn Poly Packs Pvt. Ltd. through its general attorney Sat Paul Verma invoked the arbitration clause and referred the matter to the Arbitrator. It was submitted that in spite of the notice having been served upon the licensee by the Arbitrator, the licensee did not contest the case before the arbitrator and finally the Arbitrator gave its Award dated 28.7.1997, holding that M/s. S.S Fasteners through Ashok Sachdeva, its partner, was the licensee over a portion of the industrial shed and that the licence expired on 31.12.1996 and the licence was validly revoked vide notice dated 27.1.1997 and that after the expiry of the said revocation of licence, the possession was illegal and unauthorised and the licensee was liable to pay damages for the illegal and unauthorised use of the said premises after revocation of the licence. It was submitted that this finding given by the Arbitrator in its Award dated 28.7.1997 became final as no action was taken by the licensee to get the said Award set aside under Section 34 of the Act of 1996 and in the petition under Section 36 of the said Act filed by M/s. Allwyn Poly Packs Pvt. Ltd. through its general attorney, the licensee could not be allowed to urge that the said Award was in executable. Reliance was placed on Madan Lal v. Sunder Lal, AIR 1967 SC 1233 and Bhawarlal Bhandari v. Universal Heavy Mechanical Lifting Enterprises, 1999 (1) SCC 558 : 1999 (1) RCR (Civil) 278 (SC). It was further submitted that the executing Court would not go behind the decree (under Section 36 of the Act of 1996 the Award given by the Arbitrator is enforceable like a decree of the civil Court). Reliance was placed on Vasudev Bhanjihhai Modi v. Rajabhai Abdul Rehman, 1970 (1) SCC 670:

    9. After hearing both the sides and perusing the record, I find no merit in Civil Revision 5618 of 1999 arising out of the order passed by the executing Court while executing the Award given by the Arbitrator.

    10. Section 36 of the Act of 1996 reads as under:—

    “Where the time for making an application to set aside the arbitral Award under Section 34 has expired, or such application having been made it has been refused, the Award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the Court.”

    11. From a perusal of the above, it would be clear that where the time for making an application to set aside the arbitral Award under Section 34 of the Act of 1996 had expired or such application having been made, it had been refused, the Award shall be enforced under the CPC in the same manner as if it were a decree of the Court. In the present case, the Arbitrator had given the Award on 28.7.1997 Admittedly, a copy of the said Award was served upon the licensee. Instead of challenging the said Award under Section 34 of the Act of 1996, the licensee proceeded to file a suit for injunction in the civil Court and also moved application for the grant of ad interim injunction (the orders passed on the said ad interim injunction application are the subject-matter of Civil Revision 2534 of 1999).

    12. As referred to above, the Arbitrator, in its Award dated 28.7.1997, which has assumed the position of a civil Court decree and has become final (having not been challenged under Section 34 of the Act of 1996). had held that M/s. S.S Fasteners, through its partner Ashok Sachedva, was a licensee over a portion of the industrial shed in question and the licence period had already expired. This finding given by the Arbitrator having become final between the parties, the present petitioners could not be allowed to urge that they are tenants over the portion in question in respect of the industrial shed in question and not licensees. In (1970) 1 SCC 670 (supra), it was held by their Lordships of Supreme Court that a Court executing a decree could not go behind the decree between the parties and it might take the decree according to its tenor and could not entertain any objection that the decree was incorrect in law or in facts. It was further held that until the decree was set aside in appeal or revision, a decree even if it be erroneous was still binding between the parties. It was further held that where the objection as to the jurisdiction of the court to pass the decree did not appear on the face of the record and required examination of the question raised and decided at the trial or which could have been but had not been raised, the executing Court would have no jurisdiction to entertain an objection as to the validity of the decree even on the ground of absence of jurisdiction.

    13. In the present case, as referred to above, the Award of the Arbitrator, which has assumed the position of a civil Court decree, was passed by the Arbitrator after issuing notice to the present petitioners and the question regarding jurisdiction of the Arbitrator could have been taken up before the Arbitrator but it having not been taken there, the Award given by the Arbitrator could not be said to be in executable on the ground of lack of jurisdiction.

    14. In AIR 1967 SC 1233 (supra), it was held by their Lordships of Supreme Court, while considering the provisions of Section 30 of the Arbitration Act. 1940, that if a party wanted the Award to be set aside on any of the grounds mentioned in section 30 of the said Act, it might apply within the specified period and if no such application was made during the said period, the Award could not be set aside on any of the grounds specified in Section 30 of the said Act. In 1999 (1) SCC 558 (supra) while considering the provisions of Section 30 of the Arbitration Act. 1940, it was found by their Lordships of Supreme Court that the Award given by the Arbitrator was filed in the Court and notice was issued by the Court to show cause as to why Award should not be made the rule of the Court and the said notice was served upon the respondent and despite such service of notice, the respondent did not think it fit to contest that proceedings nor had filed any objection under Section 30 of the Arbitration Act, 1940. In the result, the Court passed the decree. It was this decree which was sought to be executed. Under those circumstances, it was held by their Lordships of Supreme Court that the executing Court could not go behind the decree unless it was shown that it was passed by a Court having inherent lack of jurisdiction which would make it nullity. It was further held that the question as to whether Award was filed by the Arbitrator on his own or not was a mixed question of law and fact and could be raised only before the Award was made the rule of the Court. Reliance was placed on 1970 (1) SCC 670 (supra).

    15. The authority 1969 (1) SCWR 51 (supra) relied upon the learned Counsel for the petitioners, in my opinion, would be of no help to the petitioners. In the reported case, it was held by their Lordships that the objection as to the validity of the award could not be entertained in execution proceedings and all the questions regarding validity of the Award had to be determined by the Court in which the Award was filed and by no other Court. It was further held that after a decree was passed on the Award, it was not open to question the validity of the Award and that between the parties, the decree conclusively determined that the Award was valid nor could the decree be pronounced to be a nullity on the ground that the Award was invalid. This finding was given by their Lordships while considering the provisions of the Arbitration Act, 1940. It was further held by their Lordships that the provisions of the Rent Act prohibited the Court from passing a decree or ordering for recovery of possession of any premises in favour of the landlord and against the tenant unless the Court was satisfied that a ground of eviction existed. In the reported case, the decree was one for recovery of possession in favour of the landlord and against the tenant. The Court passed the decree according to the Award in proceedings to which the landlord was not a party, without satisfying itself that the ground of eviction existed. It was under those circumstances that it was held by their Lordships that the decree was a nullity and could not be enforced in execution. However, the law laid down by their Lordships in this authority would be of no application to the facts of the present case.

    16. In the present case, the Arbitrator had entered upon the arbitration and had given notice to the present petitioners who did not contest the arbitration proceedings before the Arbitrator. Thereafter, the Arbitrator gave its Award, holding that the present petitioners were licensees over a portion of the industrial shed and the period of licence had already expired. The said Award given by the Arbitrator became final, as no petition under Section 34 of the Act of 1996 was filled to get the said Award set aside. In this manner, the said Award became final. If the finding of the Arbitrator was that the present petitioners were licensees over a portion of the industrial shed, it could not be said that the said Award was not enforceable or was contrary to the provisions of Section 13 of the Rent Act. That being so, it could not be said that the Award given by the Arbitrator, which has assumed the status of a civil Court decree, was in executable, especially when there was no relationship between the parties as landlord and tenant and the present petitioners were only licensees over a portion of the industrial shed.

    17. In view of the detailed discussion above, in my opinion, no fault could be found with the order dated 13.10.1999 passed by the Additional District Judge, while holding that the Award was executable.

    18. So far as the other Civil Revision bearing No. 2534 of 1999 arising out of the orders passed by the courts below is concerned, there are two aspects of the matter: one is pertaining to the portion which was in possession of the present petitioners as licensees under the respondent, which matter was the subject-matter of dispute between the Arbitrator and regarding which the Arbitrator had given its Award dated 28.7.1997 while the other aspect is with regard to the remaining portion of the industrial shed in question, which according to the respondents was in unauthorised possession in the present petitioners. So far as the portion which was on licence with the petitioner is concerned in my opinion, there will be no question of granting any ad interim junction in favour of the plaintiff-petitioner in respect of the said portion, considering that the award was given by the Arbitrator, which had become final as it was not sought to be set aside under Section 34 of the Act of 1996 and was sought to be enforced under Section 36 of the said Act. Furthermore, under Section 16 of the Act of 1996, the Arbitral Tribunal is competent to rule on its own jurisdiction, with respect to the existence or validity of the arbitration agreement and a plea that the Arbitral Tribunal does not have jurisdiction shall be raised before the Arbitrator and the Arbitral Tribunal shall decide on this plea and where the Arbitral Tribunal takes a decision rejecting the plea, it can continue with the arbitration proceedings and make an arbitral Award. It is further provided therein that a party aggrieved by such an arbitral Award can make an application for setting aside such an Award in accordance with Section 34 of the said Act. Section 5 of the Act of 1996 provided that notwithstanding anything contained in any other law for the time being in force, in matters governed by the said Act, no judicial authority shall intervene except where so provided in this part.

    19. In Harike Rice Mills v. State of Punjab, 1998 (1) PLJ 395, it was held by a Division Bench of this Court even if the appointment of the Arbitrator was invalid, the same will have to be decided by the court before which the validity of the Award would be challenged. It was further held in the said authority that an unsuccessful party even could not challenge the order of the Arbitrator rejecting the challenge to its appointment even before the civil Court, before the Award was made. This being the position, in my opinion, a separate suit filed by the plaintiff-petitioner challenging the validity of the Award dated 28.7.1997 which had assumed the status of a civil Court decree, prima facie, would not be maintainable and that being so the plaintiff-petitioner would not be entitled to grant of any ad interim injunction, in respect of the portion of the industrial shed which was the subject-matter of the arbitration proceedings and the arbitration Award.

    20. The second aspect of the matter is with regard to the remaining portion of the industrial shed, which admittedly was in possession of/the present petitioner. According to the petitioner, the petitioner was in possession thereof since long. On the other hand, according to the present respondent, the petitioner entered into possession of the said portion sometime in January 1997 and in this regard the respondent had also filed an FIR with the police. The fact remains that the petitioner is in possession of the remaining portion of the industrial shed. The question that comes up for consideration is as to whether the petitioner is entitled to the grant of ad interim injunction in respect of the remaining portion of the industrial shed in question or not.

    21. Learned Counsel for the petitioner submitted before me that the petitioner being in established possession over the said portion of the industrial shed was entitled to the grant of ad interim injunction till he was ejected therefrom in due course of law. On the other hand, learned Counsel for the respondent submitted before me that the respondent admittedly being the owner of the said portion of the industrial shed was entitled to take possession of the same from the petitioner, who was in unauthorised possession thereof and no injunction could be granted against the true owner. Reliance was placed on Premji Ratansey Shall v. Union of India, 1994 (5) SCC 547 : 1995 (3) RRR 11 (SC), and DTTDC v. D.R Mehara and Sons, AIR 1996 Delhi 391.

    22. After hearing both the sides and perusing the record, in my opinion, the plaintiff-petitioner is entitled to the grant of ad interim injunction in respect of the remaining portion of the industrial shed (other than the portion which was the subject-matter of the licence deed and the arbitration Award). It is the admitted case of the respondent that the plaintiff-petitioner was in possession of the said portion of the industrial shed. Even the matter was reported to the police. Even the local Commissioner, who was appointed by the Arbitrator, in his report had submitted that the petitioner was in possession of the entire property. Under these circumstances, in my opinion, the plaintiff-petitioner could not be dispossessed from the said portion of the industrial shed, except in clue course of law. This is especially so when it is yet to be determined, with regard to the circumstances under which the plaintiff-petitioner came in possession of the remaining portion of the industrial shed in question. As referred to above, admittedly the plaintiff-petitioner is in possession of the said portion of the industrial shed.

    23. In 1994 (5) SCC 547 (supra), it was held by their Lordships of Supreme Court that the issuance of an order of injunction was absolutely discretionary and equitable relief. In a given set of facts, the injunction might be given to protect the possession of the owner or the person in lawful possession. It was not mandatory that for mere asking such relief should be given. Injunction was a personal right……The plaintiff might have personal interest in the matter. The interest of right not shown to be in existence, could not be protected by injunction. It was further held in the said authority that injunction would not be issued against the true owner. Therefore, the courts below had rightly rejected the relief of declaration and injunction in favour of the petitioners, who had no interest in the property. Even assuming that they were in possession, their possession was wholly unlawful possession of a trespasser and an injunction could not be issued in favour of a trespasser or a person who gained unlawful possession as against the owner. The law laid down by their Lordships of Supreme Court in this authority, in my opinion, could have no application to the facts of the present case. In the present case, it is yet to be determined whether the possession of the plaintiff over the other portion of the industrial shed in question is legal/lawful. That being the position, in my opinion, at this stage, it could not be said that the plaintiff was a trespasser in respect of the said portion of the industrial shed nor the ad interim injunction could be refused to him on that account. The authority AIR 1996 Delhi 351 (supra) relied upon by learned Counsel for the respondent, in my opinion, would also have no application to the facts of the present case. In the reported case, the plaintiff was a licensee and on the expiry of the period of licence, the licensee continued in possession thereof and his possession being unlawful and illegal, it was held by the Delhi High Court that the licensee was not entitled to injunction against the true owner. The law laid down in this authority again would have no application to the facts of the present case.

    24. In the present case, it is not the case of either of the party that the plaintiff-petitioner was a licensee over the remaining portion of the industrial shed in question. That being so, the law laid down by the Delhi High Court would have no application to the facts of the present case.

    25. It was submitted before me by learned Counsel for the respondent that this Court should not interfere with the order passed by the lower appellate Court while deciding the appeal against the order passed by the trial Court. Reliance was placed on The Managing Director, Hindustan Aeronautics Ltd. v. Ajit Prasad Tarway, (1972) 3 SCC 195 : AIR 1973 SC 76. However, I find no merit in this submission of the learned Counsel. In the present case, the lower appellate court while accepting the appeal and setting aside the order passed by the trial Court, had proceeded to consider the question regarding the grant of ad interim injunction only in respect of the said portion of the premises in question, which was the subject-matter of the licence deed and the arbitration Award. However, the fact remains that the plaintiff had filed the suit in respect of the entire property covered by the industrial shed in question. Admittedly, the plaintiff was in possession of the entire portion of the industrial shed. With regard to the portion which was the subject-matter of the licence deed and the arbitration Award, certainly the plaintiff would not be entitled to the grant of ad interim injunction, for the reasons already given above. However, with regard to the remaining portion of the industrial shed, there is absolutely no reason as to why the ad interim injunction should be refused to the plaintiff. The learned District Judge had not adverted itself to this aspect of the matter and had set aside the order of the trial Court and had dismissed the ad interim injunction application of the plaintiff, merely on the ground that the plaintiff was a licensee and not a tenant. However, as referred to above, this would be applicable only in respect of that portion of the property which was the subject-matter of the licence deed and the arbitration Award and not in respect of the remaining portion. That being so, it could not be said that this Court has no jurisdiction to interfere with the order passed by the District Judge, in the exercise of its revisional jurisdiction. Thus, the authority (1972) 3 SCC 195 : AIR 1973 SC 76 (supra) retiled upon the learned Counsel for the respondent, would be of no help to the respondent.

    26. In view of my detailed discussion above. Civil Revision 5618 of 1999 is dismissed with no order as to costs.

    27. So far as Civil Revision 253.4 of 1999 is concerned, it is partly dismissed and partly allowed. So far as the portion of the industrial shed which was the subject-matter of the licence deed dated 2.1.1996 and the arbitration Award dated 28.7.1997 is concerned, the plaintiff-petitioner would not be entitled to the grant of any ad interim injunction. So far as the remaining portion of the industrial shed in question is concerned, the plaintiff-petitioner would not be dispossessed therefrom during the pendency of the suit, except in due course of law and resultantly, the defendant is restrained from interfering in the possession of the plaintiff over that portion of the industrial shed till the disposal of the suit except in due course of law. There shall, however, be no order as to costs.

    Revision partly allowed.

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    Comments

    S.S Fasteners v. Satya Paul Verma .
    (Jul 11, 2000)