Mohan Kumar Gupta vs Atma Ram Aggarwal and Another

Valmiki J Mehta, J.—I have patiently heard Counsel for the appellant for some length of time. Repeated questions were put to the Counsel

for the appellant as to how the impugned order which dismisses the objections u/s 34 of the Arbitration and Conciliation Act, 1996 against the

Award is such that it can be said that there is a gross illegality or gross perversity for this Court to interfere in an appeal. The scope of challenge to

an Award by means of objections u/s 34 is limited. If the scope of hearing of objections to an Award is limited, then surely, scope of hearing

appeal against a judgment dismissing the objections will have to be further limited. Unless there is gross perversity or gross illegality in the impugned

judgment, this Court cannot interfere in an appeal. Firstly, learned Counsel for the appellant sought to argue that the Award was against the

provisions of the Benami Transactions (Prohibition) Act, 1988, however, the Counsel admits that no such objection was raised in the petition u/s

34 of the Arbitration and Conciliation Act, 1996 and neither is there any ground of appeal in this appeal filed. This objection therefore being wholly

beyond pleadings, and which are mandatory in a Petition u/s 34 of the Act, is rejected.

Learned Counsel for the appellant then sought to raise an argument that the Arbitrator has decided the case by referring to documents which

were in fact never filed before him. Once again when he was asked to show whether such an objection was raised in the petition u/s 34 of the Act,

and in the grounds of appeal before this Court, and it is admitted that no such ground has been raised. This argument is also therefore rejected.

The last argument of the Counsel for the appellant was that the Arbitrator decided the case without any evidence whatsoever and therefore the

Award is liable to be set aside. In order to appreciate this last argument, it is necessary to understand the facts of the case. The facts of the case

are that the present is a dispute between the husbands of two real sisters with respect to property No. 45/18A, Rivera Apartments, Mall Road,

Delhi. In view of the disputes between the close relations, the person who was appointed an Arbitrator was the Sala, i.e. the real brother of the

sisters, The Arbitrator passed an Award by holding proceedings and ultimately giving a finding that the subject property belongs to the respondent

No. 1 and not the appellant/objector and which property was purchased in breach of trust in the appellant''s name instead of the respondent''s

name. Some of the findings and conclusions given by the Trial Court in the impugned judgment which are relevant read as under:

Service of notice on objector was not necessary as her appointment was agreement-cum-reference. The proceedings were to commence

simultaneously. It is not a case where the agreement had taken place before hand and the reference was made by one of the parties in which case

notice may be required to be sent to the other party. Apart from that objector had been appearing before the Arbitrator. His signatures appear on

proceedings dated 20.10.97. He received letter dated 17.8.98 from the arbitrator copy of which has been filed by the objector himself and is Ex.

PW1/F. He did not raise any such plea in his notice dated 30.7.2002, copy of which is Ex. PW1/G.

It is noteworthy that award in para No. 7 recites that in May, 1998, the respondent No. 1 on the suggestion of the objector sent a sum of Rs.

80,000/- in the form of Bank Demand Draft in favour of objector. In para No. 12 of award it is mentioned that last payment of Rs. 2.71 lacs was

sent by respondent No. 1 to objector on 26.2.94 by bank demand draft. These two facts have not been disputed by the objector in his objection

petition. He has not explained as to what for the respondent No. 1 sent those amounts, if the same were not for the purchase price of the flat in

question. Thus, the objector has no legs to stand on merits.

Opportunity to cross-examine respondent No. 1 did not arise as the arbitrator did not record any oral statement of the respondent No. 1. He

has based his award on documentary evidence alone. It has been held in 1999 (1) Judgment Today 191 that the evidence includes documentary

evidence and arbitrator can given award on the basis of the documentary evidence.

It is trite that strict provisions of CPC and the Evidence Act, 1872 do not apply in arbitration proceedings. This is so specifically provided by

Section 19 of the Arbitration and Conciliation Act, 1996. The impugned judgment is a detailed judgment which holds that arbitration proceedings

were in fact conducted, the appellant was party to the same as his signatures appeared in the proceedings sheet of the Arbitrator, no explanation

was given with respect to various amounts which were received by the appellant/objector from the respondent, etc. I therefore hold that the

impugned order deals in detail with the objections raised and rightly dismissed the same. In view of the above, I do not find any gross perversity or

gross illegality for this Court to interfere in appeal against an order dismissing objections to the impugned Award. The appeal is therefore

dismissed, leaving the parties to bear their own costs.