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TMI Blog2000 (11) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent gave notice of prematurely surrendering its rights under the agreement, return of the facilities, including the premises, which they were allowed to use under the agreement and they also asked for return of the deposit of ₹ 25,00,000/-. 5. There is dispute between the parties as to whether the premises were returned in June, 1996 or in December, 1996. The appellant claims that the facilities, and the premises in which they were located, were not returned by the respondents, but were held over for which the appellants were entitled to demand compensation for wrongful use of the facilities beyond the term of the agreement- The respondents claim an amount of ₹ 25,00,000/- together with interest till the date of return of the said amount. 6. A petition under section 11 of the Arbitration and Conciliation Act. 1996 being Arbitration Petition No. 132 of 1998, was moved by the respondent for enforcing the arbitration clause contained in the agreement dated June 27, 1994. This Arbitration Petition No. 132 of 1998 was disposed of on Consent Terms by this Court by an Order made on 18th September, 1998. The order said : "By consent the disputes and differences be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly under section 28 of the aforesaid Act or under section 41 of the Presidency Small Causes Courts Act, 1882. It is contended that under these two provisions of law, the Small Causes Court is vested with exclusive jurisdiction to entertain a dispute relating to recovery of possession of any immovable property situated in Greater Bombay, or relating to the recovery of the licence fee or charge and therefore, no other Court nor Arbitrators had jurisdiction to entertain proceedings relating to recovery of licence fee or charge. Consequently, it is urged that the arbitration itself is unlawful, illegal and the award is liable to be interfered with under section 34(2)(a)(ii) of the Act. 10. Next Mr. Diwan contends that, in any event, it is the public policy in India that protection in matters of Rent Act is given to tenants to prevent exploitation of poor, helpless tenants by exploitative landlords. In this connection, we are shown the judgment of the Supreme Court in Natraj Studios (P) Ltd. v. Navrang Studios & Anr., 11. At the outset, we notice that in the petition filed by the appellant, the only ground of public policy was ground (a) which reads "the impugned award is in conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power of condonation of delay contained therein. The 1996 Act has radically altered the situation. We cannot lose sight of the fact that the 1996 Act is intended to consolidate and amend the law relating to domestic arbitration, inter-national commercial arbitration and enforcement of foreign arbitral awards as also to define the law, inter alia, as indicated in the preamble. Consequently, the Act has permitted very limited scope of challenge to an arbitral award. Section 34(1) provides that an arbitral award may be challenged only by an application for setting aside such award in accordance with subsections (2) and (3). Sub-sections (2) and (3) of Section 34 provide that an arbitral award may be set aside only on the grounds narrated in sub-section (2). Finally, sub-section (3) provides that such an application for setting aside an award may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award, or if a request had been made under section 33, from the date on which the said request had been disposed of by the Arbitral Tribunal. Thus there is extremely narrow power of condonation of delay vested in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the public policy and public interest in India. Now to consider the authorities cited by the learned counsel for the appellant. 19. Mr. Diwan cited the judgment of this Court in Nagin Mansukhlal Dagli v. Haribhai Manibhai Patel, for the proposition that, however the suit may have been framed, if the substance of the suit was a relief which can fall within the exclusive Jurisdiction of the Small Cause Court, then no Court was empowered to hear the suit irrespective of the word used in this suit. There cannot be any quarrel with this proposition. This proposition is well settled and will have to be accepted. 20. Mr. Diwan referred to the Judgment in Natraj Studios (P) Ltd. v. Navrang Studios & Anr., as defining and crystallizing the public policy or public interest. Of relevance are the observations in paragraphs 16, 17 and 18 of the judgment. In paragraph 17, the Supreme Court pointed out "the Bombay Rent Act is a welfare legislation aimed at the definite social objective of protection of tenants against harassment by landlords in various ways. It is a matter of public policy. The scheme of the Act shows that the conferment of exclusive Jurisdiction on certain Courts is purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Assuming that unjust enrichment was contrary to the public policy of India, the Supreme Court pointed out that such unjust enrichment must relate to the enforcement of the award, and not to its merits, in view of the limited scope available to challenge the award before the Court. The Supreme Court also pointed out that the challenge on the ground of unjust enrichment raised by the appellant went into the merits of the award. (c) In para 44 of Renusagar (supra) the Supreme Court notes that the expressions 'public policy', 'opposed to public policy' or 'contrary to the policy' are incapable of precise definition and that public policy connotes some matter that concerns public good and public interest. The concept of what is for the public good or in the public interest or what would be injurious or harmful to the public good or the public interest has varied from time to time. (d) Observes, the Supreme Court in paragraph 48 : "Since the doctrine of public policy is somewhat open-textured and flexible Judges in England have shown certain degree of reluctance to invoke it in domestic law. There are two conflicting positions which are referred as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended for the benefit of such landlords. 24. Even assuming that the ground of public policy is available to be urged, let us examine the merits of the argument. As rightly pointed out by Mr. Tulzapurkar, Section 34(b)(ii) permits an arbitral award to be set aside by the Court only if the Court finds that the arbitral award is in conflict with the public policy of India. What is the arbitral award which Is challenged? The arbitral award challenged before the learned Single Judge was the award holding that an amount of ₹ 25 lakhs with interest thereon calculated @ 16.5% per annum from 20th day of September. 1996, till the date of the award and thereafter @ 18% per annum till the date of payment or realization, together with a direction for payment of cost of arbitration quantified at ₹ 1,07,312.50, is the arbitral award. We find nothing contrary to the declared public policy in India, in this arbitral award. 25. Mr. Diwan contends that looking at this part of direction in the award would not be conclusive: that the Court must take an over all view and then look at the argument that what was initially entered into was a leave and licence agreement, a dispute relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich Mr. Diwan wants the Court to construe. Reading the agreement as a whole, we are not satisfied that this is an agreement of "leave and licence" as contended by Mr. Diwan. Mr. Diwan urges that notwithstanding what is expressly stated in clause 4(d), the conduct of the parties, correspondence between them and every contemporaneous circumstance would indicate the true and essential nature of the agreement. We decline to go into the said facets of the matter, for reason which follow. 29. If the appellant wanted to show that a document was different than what it was ex-facie, the obligation of showing that it was something else always rested on the appellant. The appellant had to show it by leading extrinsic evidence. In order to do so he ought to have pleaded this contention before the Arbitral Tribunal and led evidence to support this contention. Such efforts, we find none. This is not even pleaded before the Arbitral Tribunal by the appellant. No contention was urged before the Arbitral Tribunal that the agreement of 27th June, 1994 was something other than what it purports to be. No such contention having been urged, the Arbitral Tribunal was not expected to give any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 41 of the Presidency Small Cause Courts Act. 1882. We are clearly of the view that it is not one of such nature. Consequently, all these grounds must fail. 34. Mr. Diwan then raised one last question with regard to the Interest granted by the Arbitrators. He pointed out that under the agreement vide clause (6) it is provided that : "(6) The client further agrees to place the interest free deposit of ₹ 25,00,000/- (Rupees Twenty five lakhs only) for due performance of the said agreement. This shall remain with the Centre till the client performs the terms of the agreement as above and shall bear no interest at anytime whatsoever, the same is paid by Cheque Nos. 468844 and 478081 dated 26.6.94, 17.6.94 and the Centre hereby acknowledges the same." 35. He then drew our attention to the findings of the Arbitral Tribunal in para 22. He contends that the Arbitral Tribunal has held that the provisions of the Interest Act, 1978 are applicable to the facts of the case. Consequently, he contends that the interest awardable under the Interest Act alone could have been awarded and nothing more. Section 3 of the Interest Act, 1978 is relied upon to contend that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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