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TMI Blog2013 (6) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... ants. Some of the relevant facts for the purpose of deciding this appeal and cross objections as emerge from the pleadings and documents filed by both parties are as under:- FACTUAL MATRIX The Appellants and Respondent Nos. 1 to 5 ( the Respondents ) are all members of the Malhotra family of Pune. Appellant No. 1 is the father of Appellant Nos. 4 and 7 and Respondent No. 1 and the grand-father of Appellant Nos. 6, 9 and 10 and Respondent Nos. 2, 3 and 5. Appellant No. 3 is the brother of Appellant No. 1 and is the paternal uncle of the aforesaid persons. The Malhotra family owned, controlled and managed a company known as Weikfield Products Company (I) Private Limited and several other businesses, assets and properties including a partnership firm known as Weikfield Ventures International. Disputes arose within the family. It is the case of the appellants that in order to resolve all the family disputes and differences, the parties appointed one Mr. Rustam S. Gae, an old family friend of over 35 years who was well-known to all the family members and who was the former Law Secretary to the Government of India and who practiced as a Senior Advocate in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kshay Malhotra (Group C) and Shikha Malhotra, daughter of Mukesh Malhotra (Group C). All these agricultural lands are located in the villages of Bhavadi, Lonikand and Wagholi (for short the said agricultural lands ). 5. The Respondents also filed their Statement of Case/Reply dated 14th November, 2005 and their reply dated 17th November, 2005 before the Learned Arbitrator. It is the case of the appellants that the Respondents did not deny therein (i) that the agricultural lands described in paragraphs 6(s), (t) and (u) were part of the family businesses and assets ; and (ii) that the same had been purchased out of funds lent by various other family members. According to the appellants the only response to the said claim was that the Group A (later Group A and B ) had not made any claim and were not parties to the dispute and hence, the Group C (later Groups C and D ) could not raise these disputes relating to the agricultural lands. 6. It is the case of the appellants that at the first arbitration meeting on 3rd December, 2005, it was agreed that the arbitration proceedings would be conducted by the parties in person, without the presence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural lands. 9. On or about 2nd January, 2006, the respondents filed a petition before the Company Law Board under the provisions of Section 397-398 of the Companies Act, 1956 with respect to the said Weikfield Products Company Private Limited. The respondents also filed a petition before the District Judge, Pune under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the said interim award made by the learned arbitrator and also sought removal of the learned arbitrator on various grounds. 10. It is the case of the appellants that while the said arbitration petition was pending before the learned District Judge at Pune, the Chairman of the Company Law Board, held discussions with the family members for settlement of all disputes between them, which culminated in a Consent Order dated 15th December, 2006, of the Hon'ble Company Law Board, which recorded inter alia that the parties had reached an agreement for separation of all family businesses, assets and properties, except the said agricultural lands referred to above. The said order also recorded inter alia that the respondents were not agreeable to the appellants&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned District Judge in the said proceedings. The learned District Judge also held that there was no substance in the arguments of the respondents herein that separation of business and assets were never contemplated. It is held by the learned District Judge that there was no substance in the allegations made by the respondents herein and even from the record it was not found that any prejudice was caused to them on the ground of grouping of the parties. As far as issue of bias raised by the applicants to the said proceedings is concerned, the learned District Judge rejected the said plea and refused to remove the learned arbitrator. The learned District Judge rejected the plea raised by the respondents herein about the independence, impartiality and incapacity of the learned arbitrator. The respondents herein did not challenge the said order and judgment dated 3rd April, 2007 passed by the learned District Judge rejecting the said application filed under section 34 of the Arbitration Act, 1996. The said interim award as well as the said order and judgment rejecting the arbitration application have become final and binding on the parties. 13. By a letter dated 4th May, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned by the respondents. 19. On 4th June, 2007, the respondents filed their reply to the statement of case filed by the appellants and contended that the agricultural lands could not be considered as part of the disputes referred to arbitration, as they were new claims which were not part of the original Statement of Case dated 11th November, 2005 and not part of the interim award. It was also stated that the agricultural lands stood in the name of and belonged to Ankush who had purchased them by taking a loan from the family firm (in which all the family groups were partners with equal shares). On that basis, it was also contended that these disputes were not within the scope of the arbitrator's mandate or of the reference. 20. The respondents attended the arbitration meeting held on 11th June, 2007 alongwith their advocate. It is the case of the appellants that the appellants objected to representation by an advocate stating that it had been agreed at the first meeting that no lawyer would represent any party. The learned arbitrator then checked the minutes of the first meeting and however found that the said agreement had not been recorded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pune, praying for setting aside the final award of the learned arbitrator on various grounds setout therein. 23. By an order and judgment dated 31st May, 2010, the learned District Judge 1, Pune allowed the said arbitration application (Miscellaneous Application No. 899 of 2007) filed by the respondents herein under section 34 of the Arbitration Act, 1996 and set aside the final award with a clarification that it would not affect implementation of the interim award dated 31st December, 2005. By the said judgment, the learned District Judge rendered a finding that the said agricultural lands were covered under the mandate of the arbitration proceedings and thus the learned arbitrator was justified in considering the said issue. The learned Judge however held that the arbitration agreement did not indicate that the arbitrator was assigned with the work of distribution of properties of different family members and that by doing so, the learned arbitrator had acted beyond the scope of the arbitration agreement and beyond the scope of the arbitral mandate. As regards the dissolution of the partnership firm of Weikfield Ventures International, the learned District Judge h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2005 together constitute the reference to arbitration between the parties including the lady members of the family who signed the said document dated 5th December 2005. Parties were divided in 5 Groups i.e. Group A to Group E. On 10th November 2005, Group C and D i.e., consisting of appellant No. 4 to 6 and appellant Nos. 7 to 10 respectively filed their Statement of Case in concurrence with Group A and B i.e., appellant No. 1 and 2 and appellant No. 3 respectively. It was prayed that the learned arbitrator considered a fair, equitable and amicable division and separation of family businesses and assets as per the proposals set out therein. In paragraph 6(s) proposals and claims relating to certain agricultural lands standing in the name of Ankush Malhotra (Group E) and purchased from family funds provided by the family partnership firm/grand mother/grand aunt for the benefit of the family was made. In paragraph 6(t) and (u) of the Statement of claim, similar proposals and claims with regard to agricultural lands standing in the name of Akshay Malhotra (Group C) and Shikha Malhotra, daughter of Mukesh Malhotra (Group C) were mentioned. In their Statement of Case/Reply dated 14th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept the said agricultural land and it was also recorded that the respondents were not agreeable to the appellants' proposal for transfer of the said property to the other family members and instead, were willing to pay three times the value of the said lands as recorded in the registered documents to the other family members. The CLB recorded that that if the parties were able to settle the disputes with regard to the said agricultural lands standing in the name of Ankush, there would be no pending dispute and that it would enable them to release the arbitrator. The said settlement recorded before the CLB has been carried out. iv) It is submitted that parties agreed on another Valuation report in respect of the real estate of the family including the agricultural lands from M/s. Bapat Valuers Consultants Pvt. Ltd. It is submitted that name of the said Valuers was suggested by the respondents who submitted its report on 22nd December 2006. Reliance is placed on the letter dated 23rd December 2006 recording these facts addressed by Mr. Mukesh Malhotra to Mr. Puneet Malhotra. The said Valuation Report included the valuation of agricultural land standing in the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalysed and interpreted the terms of loan agreement entered into between Ankush and Weikfield Ventures International and after considering the unusual terms recorded therein, had rendered a finding that transaction would not be a loan simpliciter or an arms-length loan transaction. It is submitted that recordings of findings of facts was within the arbitrator's jurisdiction and the learned District Judge could not have taken a different view by over-stepping the limits of Section 34 by substituting its own interpretation for that of the arbitrator and re-appreciating the entire material. vii) Findings of the learned District Judge is contradictory. On one hand it has been held that the agricultural land in question was covered by the mandate of the arbitration proceedings and the arbitrator was justified in considering that issue and on the other hand, it is held that it was outside the arbitrator's scope to distribute those properties. It is submitted that the very issue had been raised in the arbitration application challenging interim award and the same was rejected by the learned District Judge in Order dated 3rd April 2007 thereby repelling the challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the petitioner relied upon a passage of Pollock Mulla, quoted earlier, that passage is only confined to the inherent powers of the court as to whether dissolution of partnership is just and equitable, but we have demonstrated in the course of our order that it is permissible for the court to refer to arbitration a dispute in relation to dissolution as well on grounds such as destruction of mutual trust and confidence between the partners which is the foundation therefor. It is submitted that the learned arbitrator had thus jurisdiction to decide the distribution of the said agricultural lands. 27. Mr. S.U. Kamdar, the learned senior counsel appearing for respondents on the other hand makes following submissions on this issue: (i) The dispute in respect of the agricultural land situated at Wagholi, Lonikand and Bhavadi villages was not the subject matter of reference before the learned arbitrator. This claim was made for the first time in the additional statement of the claim for a declaration that Group A and B had a exclusive right, title and interest in the said properties and standing in the name of respondent No. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both Groups A and B have filed their own respective statement of claim. (iv) There was no discussion in the entire interim award about those three properties. The jurisdictional challenge raised by Group E (respondents herein) to the inclusion of the said three properties by Groups C and D in their original statement of claim is also not decided anywhere. The interim award was restricted, inter alia to the 'jointly owned real estate properties'. The order passed by Company Law Board and/or observations made therein would not amount to reference on dispute in respect of those three properties to arbitration. The existence of disputes between two parties does not ipso facto mean that those disputes are actually being agitated before same forum. The question as to whether the said three properties were individual or jointly owned properties was a jurisdictional fact that required determination in order to ascertain whether the Arbitral Tribunal did in fact have the jurisdiction to decide the disputes as to the said three properties. (v) The learned District Judge having found that the learned arbitrator had incorrectly determined the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained from the grandfather/granduncle but also included a portion of consideration paid by respondent No. 2 of his own account. (ix) The learned senior counsel placed reliance upon the meaning of the word 'loan' as per legal dictionary as under:- Loan means a loan whether of money or in kind, and includes any transaction which is, in the opinion of the court, in substance a loan {Advanced law Lexicon at page 2776}. Sum of money borrowed by one person or organization from another on condition that it is repaid, generally for a specified time and often at an agreed rate of interest. {Advanced law Lexicon at page 2776}. A 'loan' is defined as delivery by one party to and receipt by another party of sum of money upon agreement, express or implied, to repay it with or without interest. {Legal Commercial Dictionary author Mitra at pg. 539} A grant of something for temporary use. {Black's Law Lexicon-pg. 954}. (x) Jurisdiction of arbitrator is determined by terms of reference and not by submission of claim. There cannot be two arbitration agreements i.e. one under two writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance is placed on section 3 of the said Act. The arbitrator proceeded to determine the issue contrary to section 3 of the said Act and thus award is patently illegal. Title of the properties always stood in the name of Ankush Malhotra. It is submitted that Section 4(3)(a) and (b) of the Benami Transactions (Prohibition) Act, 1988 provides that no suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property except in two circumstances viz. (i) where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family or (ii) where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity. It is submitted that the said three properties purchased by loans from the grandparent/grandaunt would not fall within the exceptions creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money to his son to pay the consideration for buying the property. 28. Section 3(1) of the Benami Act contains the interdict that no person shall enter into any benami transaction. The aforesaid prohibition has been judicially pronounced as prospective only, (vide R. Rajagopal Reddy v. Padmini Chandrasekharan (1995 2 SCC 630). As the Benami Act was passed on 5.9.1988 it would apply to Ext. P.11 which was executed subsequently. A contention was bolstered up in the High Court on behalf of the tenant that since the sale consideration was provided by Pyarelal the sale deed would be a benami transaction. 29. Section 2(a) of the Benami Act defines benami transaction as any transaction in which property is transferred to one person for a consideration paid or provided by another person. The word provided in the said clause cannot be construed in relation to the source or sources from which the real transferee made up funds for buying the sale consideration. The words paid or provided are disjunctively employed in the clause and each has to be tagged with the word consideration . The correct interpretation would be to read it as consideration paid or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(s), (t) or (u). There was no denial that those assets were family assets. It is submitted that by interim award, the learned arbitrator had ordered valuation of properties setout in Schedule 2. In statement of claim schedule included those three properties of Ankush Malhotra. M/s. Subhash Shah and Associates, the valuer were required to undertake valuation of the properties referred in enclosure to the letter of appointment dated 16th February, 2006. Respondents did not raise any objection about valuation of these three properties. Even the valuer Mr. Bapat also valued these three properties. The learned arbitrator chose valuation report of Mr. Bapat. No such issue was raised under section 34 by the respondents. The learned District Judge in the earlier petition filed by the respondents had already rejected the plea of the respondents that the arbitrator had no jurisdiction to distribute the family properties and assets and this finding of the learned District Judge is binding on parties. The finding of the learned District Judge in the second arbitration application challenging the final award on this issue is inconsistent with the finding of the learned District Judge in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 34. It was a loan transaction within the members of the family to grand children with understanding and was not a loan transaction between two strangers at arms length. The learned arbitrator had interpreted the documents and had rendered a finding of fact which could not have been re-appreciated by the learned arbitrator under section 34. The learned arbitrator in equitable manner and based on material on record has ordered the division of the properties amongst the family members. The learned District Judge has substituted views of the arbitrator by interpreting the evidence and has decided on merits by coming to the different conclusion on merits by re-appreciating the facts and evidence which is not permissible under section 34 of the Act. Even if arbitrator had committed any error, the said error was within his jurisdiction and not outside his jurisdiction. The learned arbitrator could not have shut his eyes on reality. 32. On the plea of benami transaction, Mr. D'vitre, the learned senior counsel placed reliance upon the exception under section 4(3) (a) and (b) and submits that it includes constructive trust. It is submitted that Ankush Malhotr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r even otherwise gave cogent reasons for his direction viz. to prevent delay. The parties filed extensive written submissions which were duly considered by the arbitrator. The arbitrator's direction thus was justified on the facts. (iii) Section 18 of the Arbitration Act provides that parties are to be treated with equality, and that each party must be given a full opportunity to present its case. The later sentence must be read in the context of the equality requirement dealt with by section 18. It is a fact that the learned arbitrator did not permit any party to be represented by advocates. Under section 19 of the Arbitration Act, the arbitrator is entitled to decide upon the procedure to be adopted in the manner he considers appropriate, unless the parties have agreed. The respondents' case that there was an agreement between the parties that advocates should be permitted, is totally incorrect and is negated by the minutes of the meeting dated 11th June, 2007 and the respondents' own version of events as no such agreement was ever pleaded or urged by the respondents. A new case cannot now be made out for the first time. In the present case, given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... throughout their contention is that the Arbitral Tribunal had no jurisdiction and considering Section 16 of the Arbitration and Conciliation Act, 1996 and considering the judgment of the Apex Court in the very dispute amongst the parties in which it was observed that the dispute regarding jurisdiction would be resolved and decided by the Arbitrator the issue was open for consideration and decision and merely because they participated and raised objections to the jurisdiction of the Arbitral Tribunal would not amount to acquiescence on their part in submitting to the jurisdiction of the tribunal. On the other hand on behalf of the respondents, it is contended that the issue of jurisdiction was an issue before the Arbitral Tribunal. Considering the terms, the Arbitral Tribunal has come to a finding that there is an Arbitral clause. Once that be the case, it is contended, considering that there was a, contract between the parties and the Arbitral Tribunal had decided the dispute this Court should not interfere with the said finding on the issue of jurisdiction. It is then contended that even assuming Clause 11 of the terms and conditions of the purchase order, the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with Hindi to enable them to proceed before the Arbitral Tribunal. It was within the competence of the petitioners to do so. Having not done so and once the tribunal has followed the procedure of the Chamber agreed to by the parties, it cannot be said that the Award atleast on the count should be set aside. There has been no failure to give an opportunity to the petitioners to present their case. The petitioners were in fact represented and had submitted their written say. Learned senior counsel submits that this judgment delivered by this court was though cited before the learned District Judge, it was not even referred to in the impugned order. It is submitted that the learned arbitrator had rejected the application of both sides for appointment of an advocate. It is submitted that once the learned arbitrator had exercised discretion not to permit any parties to engage lawyers and both parties were treated equally, the learned District Judge could not have interfered with such discretion exercised by learned arbitrator and could not have interfered with arbitration award on that ground. (v) It is submitted that both parties were allowed to file wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid statement is followed by the following statement ...if this was to be permitted inspite of the earlier oral understanding, then Group A, B, C D should also be given suitable time and opportunity to engage and brief their own lawyer to represent then as well. It is submitted that the aforesaid statement records the consent of the appellants to an agreement between the parties, under Section 19(2) of the Act, inter alia, providing for representation to both the parties by their respective advocates. (ii) It is submitted that once there was an agreement that both parties were entitled to have representation by an advocate, the Arbitral Tribunal had no choice or discretion remaining but to permit such representation, if desired, under Section 19(2) of the Act. The provisions of Section 19(2) of the Act conferring the Arbitral Tribunal the discretion to decide procedure arises only in those cases where there was no agreement as to an aspect of procedure between the parties under Section 19(2) of the Act. The Arbitral Tribunal had already verified, by perusing the minutes of the first meeting, that no agreement preventing representation by lawyers was arriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted by other institutional rules. Many sets of rules are silent on the point, and the practical effect of this is that the parties may be legally represented if they so wish. (v) Mr. Kamdar, learned senior counsel placed reliance upon the judgment of this court in case of Faze Three Exports Ltd. vs. Pankaj Trading Co. and others reported in 2004 (2) Mh.L.J.196 in support of his plea that even under section 19(3) of the Arbitration Act, 1996, the arbitral tribunal must permit parties to be represented by an advocate where complex question of law arises and effective representation is a must for the redressal of disputes between the parties. It is submitted that in the present case, various complex questions of law has arisen which requires effective representation by an advocate. Paragraphs 9 to 11 of the judgment of this case in case of Faze Three Exports Ltd. reads thus:- 9. The arbitral tribunal appears to have declined the request of the petitioner to be represented by a legal practitioner on the principal ground that allowing of advocate's presence would result in delay and protraction of the proceedings. The advocates and lawyers delay the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s legal practitioner. This was done without any authority of law or without any authority in the arbitrators to prevent the representation of the petitioners through a legal practitioner. I am of the considered opinion that even in arbitration proceedings, parties are entitled to be represented by a legal practitioner if they so desire unless they have agreed in writing that none of the parties shall be represented by a lawyer. 11. It is not disputed that Mr. Sunderlal Bagadi was not present in the arbitral meeting on 14th August, 2002. Solicitors of the petitioner by their letter dated 16th August, 2002 have also recorded in writing that Mr. Sunderlal Bagadi was not present but, the remaining two arbitrators stated that his presence was not necessary and they would inform him as to what transpired at the hearing. In para 33 of the petition, the petitioners have stated on oath that only two arbitrators were present at the arbitral meeting on 14th August, 2002 and they told the petitioner that they would convey him what transpired at the hearing. No affidavit in reply has been filed by the respondents denying this. Even before me, the learned counsel for the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a permissible contract but it is always subject to rules, of those particular Courts and Tribunals before whom the lawyers are licensed to appear and those restrictions are justifiable restrictions on the ground of reasonableness under Sub-clause 6 of Article 19, Constitution of India. 15. The third objection is about the refusal of the Arbitrators to permit the applicants to take the help of lawyers to represent their case before the Arbitrators. Here again the Rule of arbitration of the Bengal Chamber of Commerce is quite specific. By Rule 16 it is expressly declared arid provided inter alia: In any case of a formal hearing, no party shall without the permission of the Court, be entitled to appear by Counsel, Attorney, Advocate or other lawyer adviser. 16. Here again it is clear enough that normally a lawyer will not be allowed to appear or rather a party should not be allowed to appear by Counsel, Attorney, Advocate or other lawyer. If they want to appear, they can only appear with the permission of the Arbitrators. It is for the Arbitrators to permit or refuse. In this case the Arbitrators have refused the applicant's claim to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ports Ltd. (supra) relied upon by Mr. Kamdar, does not take into account the prior judgment of this court in Skanska Cementation India Limited (supra). It is submitted that in case of Faze Three Exports Ltd. (supra), this court came to the conclusion that parties were entitled to be represented by a legal practitioner, if they so desire, unless they agree in writing to the contrary, that they would not be represented by a lawyer. It is submitted that in case of Faze Three Exports Ltd. (supra) it was not a case where one of the party sought to act contrary to the previous understanding between the parties and the consistent previous conduct of the parties which bears out the understanding. Learned senior counsel submits that in any event, the view in the earlier judgment of this court in case of Skanska Cementation India Limited (supra) should be preferred. Learned District Judge failed even to consider the judgment of this case in case of Skanska Cementation India Limited (supra) though relied upon by the appellants and the learned District Judge relied upon only the later judgment of this court in case of Faze Three Exports Ltd. (supra) which did not even consider the previous jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had accepted to sort out dispute before chosen forum i.e. family friend who was appointed as a sole arbitrator. It is submitted that it is not in dispute that even in the hearing of earlier proceedings, none of the parties were allowed to engage any advocate. It is submitted that the learned District Judge ought to have considered the background of this case while considering the issue whether discretion exercised by the learned arbitrator to refuse to permit to engage a lawyer was proper or not. The learned arbitrator has refused to permit engagement of lawyer to avoid further delay. No hearing took place for one year before the learned arbitrator in view of the pendency of application filed by the respondents under section 34 before the learned District Judge impugning interim award. The respondents had requested the learned arbitrator to permit engagement of the lawyer after one year. 36. Mr. D'vitre, the learned senior counsel appearing for the appellants further submit that the learned arbitrator had considered the tax return of Ankush for the relevant years which clearly showed his limited financial resources at the relevant time. It was also considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng regard to all the facts and circumstances. Section 4 excludes the application of the Act to the properties setout therein in (a) and (b) viz. held by a coparcener in a Hindu Undivided Family, for the benefit of the others in the family, as also with regard to properties held by persons standing in a fiduciary capacity. The learned arbitrator has clearly held that the said lands were purchased for the benefit of the entire family and only held in the name of Ankush for convenience. Such an understanding is not hit by the provisions of the Benami Transaction (Prohibition) Act, 1988. The respondents' submission that the nephew (Ankush) was not in a fiduciary position to his grand father/grand uncle or other family members is not accurate. Fiduciary obligations may arise from the relationship of parties per se or from relationships arising from contract. In the present case, qua the agricultural lands, it is clear from the arbitrator's findings that Ankush was in a position of trustee or fiduciary qua the other family members. 38. In so far as issue pertaining to the partnership firm of Weikfield Ventures International is concerned, Mr. Kamdar submits that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt injunction from creating any third party interest, changing the nature of the suit property an any manner, whatsoever by virtue of power of attorney. (c) Hon'ble Court be pleased to grant leave to the plaintiff U/O 2 R 2 of the civil procedure code for challenging the sale transaction entered into by the defendants in respect of the suit property and losses incurred. (d)... (e)... (f)... 40. The learned senior counsel further submits that the findings of the learned District Judge that the dissolution of the partnership firm could be done only by court of law and not by the arbitrator is ex-facie incorrect. Suit was not for relief of dissolution of the partnership and such question was not sub-judice before the learned District Judge. The dissolution of the partnership firm as recorded would in fact automatically result in the respondents obtaining the reliefs that they were seeking in the said suit as above, as in that event inter alia the partners' authority to deal with the properties under the power of attorney would cease. The fact that the award was made during the pendency of the suit was w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned senior counsel placed reliance upon the judgment of the Supreme Court on this issue in case of Municipal Corporation of Delhi and others vs. International Security and Intelligence Agency Ltd. Reported in (2004) 3 SCC 250 and in particular paragraphs 4 to 11, 13 to 15, 18 to 21, 23 and 24 which read thus:- 4. Disputes arose between the parties and on a petition under Section 8 of the Act filed by the respondents, the Court directed the same to be determined through arbitration by a retired Judge of the High Court. The order of the Court appointing the arbitrator and referring the disputes for determination by him achieved a finality as the appellants did not file any appeal there against and both the parties submitted to the jurisdiction of the arbitrator. On 14.3.1997, the arbitrator gave an award. The award is a non speaking one. The arbitration agreement between the parties does not require the arbitrator to make a reasoned award. The respondents filed an application under Section 14 of the Act for making the award a rule of the Court. On 26.5.1997, objections were filed by the appellants seeking setting aside of the award. Though the objection petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal on the ground that it was awaiting the result of review petition and was persuaded to file an appeal because of the respondents having filed an appeal. The cause assigned by the appellants for seeking condonation of delay did not apparently amount to sufficient cause within the meaning of Section 5 of the Limitation Act. When the matter came up for hearing, the appellants submitted that the memo of appeal filed on 27.10.2001, if barred by time and hence not maintainable as an appeal, could still be treated as a cross objection under Order 41 Rule 22 of the CPC which having been filed within the prescribed period of limitation for filing cross objection the same deserved to be heard and decided on merits along with the first appeal filed by the respondents herein. 7. On 12th July, 2002, the first appeal filed by the appellants has been directed to be dismissed by the Division Bench as barred by time consequent upon the dismissal of its application under Section 5 of the Limitation Act. Feeling aggrieved by the judgment dated 12.7.2002, SLP(C) 20508/2002 has been filed by Municipal Corporation of Delhi. 8. Subsequently by an order dated 20th Septemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal to be placed for hearing before a three-Judge Bench. Competence and maintainability of cross objections in an appeal preferred under Section 39 of the Arbitration Act, 1940 ? 13. Sections 39 and 41 of the Act and Rule 22 of Order 41 of the Code of Civil Procedure provide as under: Arbitration Act, 1940 Sec. 39 Appealable orders - (1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order: - An order- (i) superseding an arbitration; (ii) on an award stated in the form of a special case; (iii) modifying or correcting an award; (iv) filing or refusing to file an arbitration agreement; (v) staying or refusing to stay legal proceedings where there is an arbitration agreement; (vi) setting aside or refusing to set aside an award; Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court. (2) No sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andum of objection, the original appeal is withdrawn or is dismissed for default, the objection so filed may nevertheless be heard and determined after such notice to the other parties as the Court thinks fit. (5) The provisions relating to pauper appeals shall, so far as they can be made applicable, apply to an objection under this rule. 14. Right of appeal is creature of statute. There is no inherent right of appeal. No appeal can be filed, heard or determined on merits unless the statute confers right on the appellant and power on the Court to do so. Section 39 of the Act confers right to file appeal, in so far as the orders passed under this Act are concerned, only against such of the orders as fall within one or other of the descriptions given in clauses (i) to (vi) of sub-Section (1) of Section 39. The Parliament has taken care to specifically exclude any other appeal being filed, against any order passed under the Act but not covered by clauses (i) to (vi) abovesaid, by inserting the expression and from no others in the text of sub-Section (1). Clause (a) of Section 41 extends applicability of all the provisions contained in the Code of Civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, of the opinion that cross objection by the respondent was not maintainable. . Such observation is not correct and proceeds on certain wrong premises. Firstly, form of cross objection is procedural and is only a manner of exercising right of appeal which is substantive, as we have already stated. Secondly, it is not merely the procedure prescribed by the Code of Civil Procedure which has been made applicable to proceedings under the Arbitration Act by Section 41(a) of the Act; the entire body of the Code of Civil Procedure, 1908 has been made applicable to all proceedings before the Court and to all appeals under the Arbitration Act, 1940. The provision is general and wide in its applicability which cannot be curtailed; the only exception being where the provisions of the Arbitration Act and/or of rules made thereunder may be inconsistent with the provisions of the Code of Civil Procedure, 1909 in which case the applicability of the latter shall stand excluded but only to the extent of inconsistency. We may hasten to add that to the extent of our disagreement with the law laid down in B. Subba Reddy's case, the proposition appears to have been rather widely stated in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to have filed appeal within the prescribed period of limitation calculated from the date of the order if he wished to do so. Having allowed that opportunity to lapse he gets another extended period of limitation commencing from the date of service of the notice of the appeal enabling him putting in issue for consideration of the Appellate Court the same grounds which he could have otherwise done by way of filing an appeal. This extended period of limitation commences from the date of service of the notice of appeal and such notice ought to be in a valid or competent appeal. 23. Illustratively, we may refer to some judicial opinion as to non-maintainability of cross objections consequent upon the non-maintainability of the original appeal. In M/s. Malhati Tea Syndicate Limited Vs. Revenue Officer, Jalpaiguri Ors., AIR 1973 Cal. 78, a Division Bench of Calcutta High Court presided over by P.B. Mukherji, CJ (as His Lordship then was) held the cross objection liable to fail in view of the original appeal itself failing in view of its having been filed in the name of a company which was no longer in existence. In Dhani Ram Vs. Smt. Sushila Devi, AIR 1977 HP 83, R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as cross objection and being taken up for hearing on merits does not arise. Independently treated as an original appeal the same was held to be hopelessly barred by time as the delay was not explained satisfactorily. On this aspect we are not persuaded to take a view different from the one taken by the High Court. The appeal filed in the High court by the appellants herein has been rightly held liable to be dismissed as time-barred and is not available to be heard and decided as cross objection in view of the original appeal filed in the High Court by the respondents herein having failed as incompetent. 42. Mr. D'vitre, the learned senior counsel appearing for the appellants placed reliance upon the judgment of this court (R.D. Dhanuka, J.) in case of Masusmi Sa Investment Llc vs. Western Express Highway delivered on 6th November, 2012 in the matter of COMPANY APPEAL (L) NO. 47 OF 2012 IN COMPANY LAW BOARD NO. 57 OF 2012 alongwith other connected matters and in particular paragraphs 41, 44, 51 and 55 in support of his plea that in view of section 5 of the Arbitration and Conciliation Act, 1996, this court can entertain only such proceedings which are specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid Act are permissible and all other acts or things not mentioned are not permissible. 51. In my view on conjoint reading of Section 5 with Section 37 of the Arbitration Act, 1996, it is clear that judicial authority is barred from intervening in any proceeding which are not otherwise provided in Part I of the Arbitration Act, 1996. In my view, the Arbitration Act, 1996 being a self contained code and the order under Section 8 passed by the judicial authority or by the court is not appealable under Section 37, the present appeal under Section 10F is not maintainable. In my view, there is no merit in the submission of Mr. Dwarkadas, the Learned Senior Counsel that there is no bar under Section 37 from hearing appeal against any other order nor specifically mentioned in Sections 37(1)(a) and (b) and 37(2)(a) and (b). In my opinion, from the expression used and from no others , it is clear beyond reasonable doubt that appeal is not maintainable against any other order other than what is mentioned in Section 37(1)(a) and (b) and 37(2)(a) and (b). In my view there is clear bar under Section 37 restricting right of appeal only against specified orders set out therein and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dure, 1908 and also amendment to the said provisions carried out in 1976. It is submitted that under provisions of Arbitration and Conciliation Act, 1996, there is no express bar from the applicability of the Code of Civil Procedure to arbitration proceedings in court. It is submitted that in absence of any such express and/or implied bar, the provisions of Code of Civil Procedure, 1908 are applicable to the arbitration proceedings in court in entirety. Learned senior counsel submits that the impugned award was challenged by the respondents on various grounds. Some of the grounds of challenge were not accepted by the learned District Judge. It is submitted that the refusal on the part of the learned District Judge to set aside the impugned award on some of such grounds which were raised by the respondent would give right to the respondents to challenge that part of the order by filing cross objection. It is submitted that every ground of challenge is a separate and distinct ground for setting aside the impugned award. Mr. Kamdar, the learned senior counsel placed reliance on the judgment of the Supreme Court in case of S. Nazeer Ahmed vs. State Bank of Mysore and others reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds which that court decided against him. In that case the finding can be questioned by the respondent without filing cross-objections. The Law Commission had accepted the correctness of the Full Bench of Madras High Court in Venkata Rao's case. The Commission had also accepted the view of the Calcutta High Court in Nrisingha Prosad Rakshit vs. The Commissioners of Bhadreswar Municipality that a cross-objection was wholly unnecessary in case the adverse finding was to be attacked. The Commission observed that the words support the decree... appeared to be strange and what is meant is that he may support it by asserting that the ground decided against him should have been decided in his favour. It is desirable to make this clear . That is why the main part of Order 41 Rule 22 was amended to reflect the principle in Venkata Rao's case as accepted in Chandre Prabhuji's case. 20. So far as the Explanation was concerned, the Law Commission stated (page 298) that it was necessary to empower the respondent to file cross-objection against the adverse finding. That would mean that a right to file cross-objections was given but it was not obligatory to fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench in Nishambhu Jena's case and the view expressed by U.N. Bachawat, J. in Tej Kumar's case in the Madhya Pradesh High Court reflect the correct legal position after the 1976 Amendment. We hold that the respondent-defendant in an appeal can, without filing cross-objections attack an adverse finding upon which a decree in part has been passed against the respondent, for the purpose sustaining the decree to the extent the lower court had dismissed the suit against the defendants-respondents. The filing of cross-objection, after the 1976 Amendment is purely optional and not mandatory. In other words, the law as stated in Venkata Rao's case by the Madras Full Bench and Chandre Prabhuji's case by this Court is merely clarified by the 1976 Amendment and there is no change in the law after the Amendment. 45. Mr. Kamdar, the learned senior counsel placed reliance upon the judgment of the Supreme Court in case of ITI Ltd. vs. Siemens Public Communications Network Ltd. Reported in (2002) 5 SCC 510 in support of his plea that the provisions of Code of Civil Procedure, 1908 are applicable to the arbitration proceedings. Paragraph 13 of the said judgment reads t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curring in the award. None of the party had applied to the learned arbitrator for interpretation of any part of the award or any specific point. It is submitted that under section 33(3) of the Act, the learned arbitrator could correct any error of type referred to in clause (a) of Sub-Section (1) on its own initiative within 30 days from the date of the arbitral award. The error corrected by the learned arbitrator was not of the type and/or nature prescribed under section 33(1)(a). The appellants had not issued any notice to the respondents before pointing out any such alleged error in the impugned award. Even the arbitrator did not issue any notice to the respondents before making correction of any such error. The appellants had admitted before the learned District Judge that the note was prepared and furnished by Mukesh Malhotra suggesting various corrections in the impugned award. It is submitted that the learned arbitrator carried out such corrections as suggested by Mr. Mukesh Malhotra and furnished corrected copy of such award to the respondents. On 19th July, 2010, copy of the impugned award was received only by Mukesh Malhotra admittedly. The corrections carried out in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessarily imports fresh consideration of matters already considered by them. Now they can only consider and give a decision upon matters which are referred to them under the arbitration agreement. It follows that the reconsideration can only be as to the merits of the award. They reconsider nothing when they re-write the award on a stamped paper. We think the matter was correctly put by Mitter, J., in Nani Bala Saha v. Ram Gopal Saha in the following observation: That cl. (c) means this and nothing more: namely, that where the court finds an error of law in the award itself or in some document actually incorporated thereto on which the arbitrator had based his award, that is to say, finds the statement of some erroneous legal proposition which is the basis of the award, it can remit the award to the arbitrator for reconsideration and Want of registration is a defect dehors the award or the decision of the arbitrator, and so in our judgment is not covered by cl. (c) of S. 16(1), Arbitration Act of 1940. What was said there about a want of registration is clearly equally applicable to a want of stamp. 7. Mr. Pathak appearing for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .J., in Mordue v. Palmer (1870) 6 Ch A 22 at p. 31: I think the result of the cases at law is that when an arbitrator has signed a document as and for his award, he is functus officio, and he cannot of his own authority remedy any mistake. In the present case, ex-hypothesis, the award has already been made and the arbitrator has therefore become functus officio. It is that award which requires stamp. Section 151 of the Code cannot give the court power to direct the arbitrator to make a fresh award; that would be against well-established principles of the law of arbitration. It would again be useless to have another copy of the award prepared and stamped for the copy would not be the award and no action in a court can be taken on it. The order cannot therefore be supported by s. 151 of the Code. It is of some interest to read here the following passage from Russel on Arbitration (14th Ed.,) p. 325: The usual practice in preparing an award is to have two copies made of it. One the arbitrator signs, which then becomes then the original award, and this is delivered to the party who takes up the award. The other copy is available for the othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced on what are called certain fundamental principles governing all arbitrations. It is urged that once an award is wholly set aside, the arbitrator is functus officio and thereafter he cannot function again to decide the same dispute. This is said to be a fundamental principle of all arbitrations, and reliance is placed on a passage in Russel on Arbitration (15th Edn., p. 298), where the effect of setting aside an award is stated thus- If an award is wholly set aside, the arbitrator is functus officio. Reliance is also placed on Morduse v. Palmer , where it was held- An arbitrator having signed his award is functus officio and cannot alter the slightest error in it, even though such error has arisen from the mistake of the clerk in copying the draft. The proper course in such a case is to obtain an order to refer the award back to the arbitrator. Reliance is also placed on Sutherland and Company v. Hannevig Brothers Limited. That was a case under the English Arbitration Act of 1889 which provided that an arbitrator could correct in an award any clerical mistake or error from any accidental slip or omission and had thus varied the rule laid down in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go on with respect to the same dispute or with respect to some other disputes arising under the arbitration agreement. This was the view taken in the Barangore Jute Factory case(1). Similar view has been taken in Rallis India Ltd. v. B.V. Manickam Chetti Co. and in Firm Gulab Rai Girdhari Lal v. Firm, Bansi Lal Hansraj. We think that this view is correct. 50. Mr. Kamdar also placed reliance upon the judgment of the Supreme Court in case of Satwant Singh Sodhi vs. State of Punjab Ors. reported in (1999) 3 SC 487 and in particular paragraphs 2, 6 and 8 in support of his plea that when award is signed, arbitrator becomes functus officio. Paragraphs 2, 6 and 8 of the said judgment reads thus:- 2. In relation to the construction of High Level Bridge over river Ghaggar on Pehawa Road at Devigarh, an agreement was entered into between the appellant and the respondents. The disputes between them arose in respect of certain claims made by the appellant and the matter was referred to arbitration (respondent No. 3) pursuant to an order made by Sub-Judge (1st Class), Patiala. The appellant submitted his claim before the Arbitrator and sought for an interim aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The award becomes valid and final so far as the arbitrators or umpire are concerned the moment it is made and signed by them. The provision for giving notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and the award is for the purpose of limitation under Art. 178 of the Limitation Act, entitling either party to apply to the Court for the filing in Court of the award. No time is fixed for the giving of such notice by the Arbitrator and it has been held in several cases that it may be done within reasonable time either by the Arbitrator or by his agent. A notice may be given to one party and may not be given to another party for a much longer period. It cannot be said that an award becomes final so far as the first party is concerned and no as against the other entitling the Arbitrators to scrap the award and make a fresh one. There is thus a fundamental difference between the making, signing and delivery of a judgment and making and signing and giving notice of an award. In the former case all three must be simultaneous acts and parts of the same transaction. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h could be delegated to a third party: Buta v. Municipal Committee of Lahore (1902) 29 Cal 854 : 29 IA 168-7 CWN 82: 8 Sar 327 (PC) In the absence of any evidence showing that the arbitrator in any way took the defendant into his confidence, no misconduct can be attributed to him by reason of the contents of the award having leaked out before it was pronounced. Any help given by the defendant in the preparation of the copy of the award sent to the plaintiff cannot also affect the award itself. We are therefore of opinion that these circumstances relied on by the learned Subordinate Judge, though raising some suspicion against the arbitrator are not sufficient to establish a charge of misconduct. (The rest of this judgment is not material for the purposes of this report.) 52. Mr. D'vitre, the learned senior counsel appearing on behalf of the appellants made following submissions on merits of the cross objections:- (i) There was no ground raised by the respondents in their application filed under section 34 before the learned District Judge that arbitrator had become functus officio. No such ground thus could be raised by the respondents in their cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date and put his initial on every page. Place of the award mentioned at Pune was deleted which was non-sequitur and insignificant. Under section 20(2) of the Act this place of arbitration was to be mentioned for the purpose of showing that the arbitration proceedings was held at Pune which was not in dispute. The date was changed by the learned arbitrator from 25th July to 21st July as the learned arbitrator had cancelled his personal visit of Pune which was proposed to be on 25th July. It is submitted that all these corrections were in respect of clerical mistake and neither there was any substance of change nor was there any change in the body of the award. All these corrections were inconsequential and insignificant. There is distinction between the change of substance and clerical mistake. The learned counsel also placed reliance upon the note prepared by the learned arbitrator which was placed on record before the learned District Judge which note was also referred in the written arguments of the appellants before the learned District Judge. The said note was addressed by the learned arbitrator to Mr. Sodhi, the registrar appointed by the parties pointing out ministerial/cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en held that there is no power left in the arbitrator to make change of substance except in the circumstances provided in law. It is submitted that in the said judgment, the Supreme Court had considered section 13(d) of the Arbitration Act, 1940. The learned senior counsel submits that there was no miscarriage of justice by such corrections of clerical mistake in the impugned award. The learned senior counsel submits that on these facts, no bias could be imputed against the learned arbitrator by the respondents. It is submitted that the learned arbitrator admittedly did not show the award to any party. If Mr. Sodhi had shown that award to one of the party, no bias could be imputed against the learned arbitrator. There was no interaction shown between the learned arbitrator and the appellants by the respondents in application filed under section 34 or even in the cross objections. The allegations of bias made by the respondents against the learned arbitrator was all throughout rejected by the learned District Judge. The learned arbitrator was in Delhi when his registrar opened the award and showed the same to Mr. Mukesh Malhotra. Whether Mr. Sodhi had shown that note prepared by Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powered to make final award. The findings of the learned District Judge on the issue of jurisdiction is totally contradictory and perverse. REASONS AND CONCLUSIONS: 58. For the purpose of deciding whether the learned District Judge was right in his findings on the issue in respect of the agricultural properties or not, it will be necessary to refer to the agreements entered into between the parties for referring the disputes to arbitration and the pleadings filed by the parties before the learned arbitrator. 59. On perusal of the undertaking and mandate dated 28th October, 2005 duly signed by the parties, it is clear that the parties agreed to appoint arbitrator who was former Law Secretary to the Government of India and was practicing as senior advocate in Supreme Court of India to settle all disputes or differences arising amongst the parties regarding business run and properties owned by the family. The parties also agreed to present all the relevant papers to the learned arbitrator regarding the disputes required to be arbitrated by 10th November, 2005. By separate writing dated 5th December, 2005 signed by other family members, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C and grand parents forming part of Group A and B were not party to the said dispute could not insist any change in its status in ownership of the lands owned by Ankush of Group C. In respect of the properties mentioned in para 6(t) and 6(u), it is submitted that, the same was not the matter for the learned arbitrator to decide because the dispute sought to be resolved as stated by Mukesh was only between Group B and Group C. On perusal of the said written statement filed by the respondents, it is clear that only objection raised in the written statement in respect of the said agricultural properties referred to in paragraphs 6(s)(t) and (u) by the appellants and by which the appellants had sought distribution of the said properties on the plea that the said properties were purchased out of the funds provided by the family members, was that the said reliefs could not be insisted by Mukesh Group. No issue of jurisdiction was raised by the respondents in the said reply. In the said written statement, it was pleaded by the respondents themselves that the learned arbitrator had been appointed to settle all disputes and differences arising amongst the signatories to the appointment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitration Application No. 149 of 2006 in the court of the learned District Judge Pune. By order and judgment dated 3rd April, 2007, the leaned District Judge, Pune rejected the said arbitration application. The learned District Judge rejected the plea of bias raised by the respondents against the learned arbitrator. In so far as the issue of jurisdiction raised by the respondents in the said arbitration application is concerned the learned District Judge held that looking to the widest possible term, on settlement of disputes or differences arising amongst them regarding businesses run and properties owned by the family raised in the mandate dated 28th October, 2005, it was difficult to accept the contention of the applicants that the terms of reference did not include separation of businesses and assets. The learned District Judge in the said order also referred to the order passed by the company Law Board in the proceedings filed by the respondents. The learned District Judge recorded that it was brought to his notice that except the lands at Wagholi, Lonikand and Bhabadi (subject matter of the present dispute), all other disputes had been resolved before the Company Law Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents regarding these three properties the learned arbitrator has rendered finding that he had jurisdiction to adjudicate upon in respect of those properties and rejected the objection raised by the respondents by holding that all these matters were covered within the four corners of the arbitration agreement dated 28th October, 2005. In their arbitration application filed under section 34 before the learned District Judge Pune, it was pleaded that properties owned by Ankush were not subject matter of the arbitration agreement and were not included in the interim award dated 31st December, 2005. There was no fresh consent or notice under section 33 by any of the parties regarding inclusion of those three properties to the arbitration. It was pleaded that the arbitral award thus dealt with the dispute not contemplated or not falling within the terms of settlement to arbitration and contains decision on the matters beyond the scope of submission to arbitration. On this issue the learned District Judge in the impugned order and judgment rendered a finding that on considering the wording of the mandate, although resolution of dispute pertains to properties owned by the family, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties including distribution in respect of those properties which were found to be family properties by the learned arbitrator though was standing in the name of individual members of the family. 65. The respondents did not challenge the order passed by the learned arbitrator that the statement of case filed by the appellants was merely addendum to their earlier statement of case and was not a new statement of case. In any event, in view of section 23 of the Arbitration Conciliation Act, 1996, the arbitral tribunal is empowered to permit the parties to supplement his claim during the course of arbitration proceedings. It is not in dispute that the learned arbitrator had permitted the respondents to file their additional written statements. It is not in dispute that the earlier award rendered by the learned arbitrator was interim award. It is not the case of the respondents that on rendering the said interim award by the learned arbitrator, he had become functions officio. On the contrary the record indicates that the learned arbitrator made interim award in view of the adjournment application made by the respondents on their personal grounds. Perusal of the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of section 7(4)(c) of the Arbitration and Conciliation Act, 1996. There is no substance in this submission made by Mr. Kamdar, the learned Senior Counsel for the respondents that the appellant cannot seek reliance on section 7(4)(c) of the Act in support of the plea that the arbitration agreement existed between the parties, in view of the fact that the agreement to refer the particular disputes to arbitration already existed between the parties. In my view, the arbitration agreement to refer the disputes in respect of these three properties already existed. This however, does not preclude the party from placing reliance upon section 7(4)(c) as and by way of alternate submission. On perusal of the earlier written statement filed by the respondents, it is clear that it was respondent's own case that the learned arbitrator had jurisdiction to adjudicate upon all the disputes and differences between the parties which were already on record. 69. On perusal of the impugned order passed by the learned District Judge, it is clear that on the one hand, the learned Judge rendered finding that considering the wording of the mandate that it includes disputes pertaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial produced by the parties before the learned arbitrator. The learned District Judge was not deciding the first appeal and could not have come to a different conclusion on re-appreciation of facts while deciding the arbitration application under section 34 of the Arbitration Conciliation Act, 1996. The impugned order passed by the learned District Judge setting aside the impugned award by re-appreciating the evidence and by rendering different findings of fact under section 34 of the Arbitration Conciliation Act, is impermissible and deserves to be set aside. 71. I am not inclined to accept the submission made by Mr. Kamdar the learned senior counsel for the respondents that there is no contradiction in the findings rendered by the learned District Judge. I am not inclined to accept the submission of Mr. Kamdar that the learned Arbitrator was only empowered to decide the jurisdictional fact and not to decide the dispute in respect of distribution of three properties. Both the parties had already agreed in the said two writings that the arbitrator had to decide the disputes also in respect of the family properties though held in the name of individual family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned District Judge in the impugned order has rendered a new finding that on the material produced on record it could not be said that the properties were family properties and that infact same were self-acquired/separate properties of the Ankush subject to rights of the lenders to recover loan amount with interest provided by them for purchase of the said property by him. While coming to this conclusion, the learned District Judge came to the conclusion that the agreement of repayment of loan which compelled the purchaser to sell the property purchased and to retain certain percentage of sale proceeds and to pay remaining to the opponents, could not be said to be legally enforceable agreement. The learned District Judge also observed that the condition that if the loan was not repaid by the appellants herein, that they were entitled to get 85% of the surplus amount from the sale proceeds on sale of the landed property seems to be quite unreasonable as the land so purchased by applicant Ankush would go back to the subsequent purchaser, and he would be entitled to retain 15% of the sale proceeds only and the remaining would go to the opponents/lenders towards recovery of loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two properties, the learned arbitrator applied 1/6th formula based on the oral understanding between the parties. The learned arbitrator also considered affidavit dated 13th June, 2007 filed by Akshay. In my view, Mr. D'vitre the learned senior counsel appearing for the appellant is right in his submission that finding of the learned arbitrator was based on interpretation of the terms of the loan agreement and other documents on record demonstrates that it was not simpliciter loan transaction and the transaction was not at the arms length, as the loan agreement provided for compensation and share in the property and such finding could not be substituted by the learned District Judge. In my view the learned arbitrator while rendering such finding has considered the documents on record and on interpretation of the terms of the agreement which interpretation in my view is a possible interpretation. The learned District Judge thus could not have substituted the possible interpretation of the learned arbitrator with any other interpretation. Even if there was any error in recording such finding, it was within the jurisdiction of the learned arbitrator and not outside his jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f provisions of Benami Act. As far as the judgment of the Supreme Court in the case of Pavankumar (supra), relied upon by Mr. Kamdar on this issue is concerned, the Supreme Court has considered the definition under section 2(a) of the Benami Act. The Supreme Court took a view that even if the party had availed himself of the help rendered by his father for making up the sale consideration that would not make the sale deed a benami transaction. After considering the evidence recorded by the parties, the Supreme Court to that conclusion. However, in the facts of this case, none of the parties had led any oral evidence. The learned arbitrator interpreted the documentary evidence produced on record and rendered finding that it was not simpliciter loan transaction but was a transaction with the understanding that in case of default in repayment, the other parties would be entitled to compensation and share in the property. In my view the judgment of the Supreme Court in the case of Pavankumar is clearly distinguishable with the facts of this case and is of no assistance to the respondents. 77. As far as the submission of Mr. Kamdar that the award in respect of dissolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utes and differences arising between the parties referred to arbitration, the arbitrator will, in general, be able to deal with all matters including dissolution. In my view, as the said firm was carrying on family business and the dispute in respect of the family business was admittedly having been referred to arbitrator, the learned arbitrator rightly exercised his jurisdiction to dissolve the said firm and the same was not beyond his jurisdiction. The judgment of the Supreme Court in the case of V.H. Patel would squarely apply to the facts of this case. In my view there is no substance in the submission of Mr. Kamdar on this issue that the learned arbitrator acted beyond his jurisdiction to pass the order for dissolution of the said firm. 79. The next issue which arises for consideration of this court is whether the refusal on the part of the learned arbitrator to permit the respondents to represent themselves by advocate was in violation of section 34(2)(a)(iii) of the Arbitration Conciliation Act or that the respondents were deprived of the full opportunity to present their case. It is not in dispute that the learned arbitrator was old family friend from 35 ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitral tribunal in conducting the proceedings, the arbitral tribunal is empowered to conduct the proceedings in the manner it considers appropriate. As far as submission of Mr. Kamdar, the learned senior counsel that in the meeting held on 11th June, 2007, there was an agreement arrived at between the parties that both the parties were entitled to have representation by advocate, the learned arbitrator had no choice or discretion but to permit such representation if desired, under section 19(2) of the Act is concerned, reference to the minutes of the said meeting of 11th June, 2007, the application made in writing by the respondent on 11th June, 2007, the written arguments filed by the respondents before the learned arbitrator would be relevant. On perusal of the minutes of the said meeting, indicates that the learned arbitrator exercised powers vested in him and gave a ruling that no lawyers need be engaged for the hearing and hearing should be conducted by the parties themselves as conducted earlier. The learned arbitrator recorded that such ruling was given with a view to prevent protraction of the proceedings by lawyers in the family matter. After giving that oral ruling, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the discretion of the tribunal. Both the parties had sought opportunity to engage lawyers. Both the parties had been dealt with equally. I am unable to accept the submission of Mr. Kamdar that this court in the said judgment had considered the provisions providing bar from allowing any party to engage an advocate to represent their case before the learned arbitrator. On perusal of the said judgment carefully, I do not find any such prohibition in the rules of Bharat Chamber of Commerce prohibiting any party from engaging any advocate considered in the said judgment. Though this issue was urged by the petitioner before the learned District Judge, on perusal of the impugned order passed by the learned District Judge, it is clear that neither this judgment was referred by the learned Judge nor was followed in the impugned order. 83. As far as judgment of this court in the case of Faze Three Exports Ltd. (supra) relied upon by Mr. Kamdar the learned counsel for the respondent is concerned, on perusal of the said judgment, it is clear that the earlier judgment of this court rendered in the case of Skanska (supra), holding that in the absence of any agreement between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties for the first time across the bar in this appeal. 86. The next question that arises for consideration of this court is whether cross objections filed by the respondents is maintainable or not and if so, whether the respondents have made out a case for entertaining such cross objections on merits. 87. It is not in dispute that the arbitration application filed by the respondents under section 34 of the Act impugning the final award was allowed and the said impugned award came to be set aside in toto. It is also not in dispute that this appeal filed by the appellants herein is maintainable under section 37(1)(b) of the Arbitration Act. Arbitration Appeal No. 12 of 2010 filed by the appellants has been admitted. Notice in respect of the admission of the said appeal was issued to the respondents. There was some delay in filing cross objections by the respondents. After hearing both sides, by a separate order, this court has allowed the civil application for condonation of delay in filing cross objections keeping the issue of maintainability of the cross objections open. 88. On reading of section 37(1)(a) and (b), it is clear that no ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s heard, the respondents may file cross objections in respect of the decree in so far as it is based on that findings. 90. In my view, the provisions of the Code of Civil Procedure, 1908 would apply to the arbitration proceedings filed in court to the extent, it is not inconsistent with any of the provisions of the Arbitration and Conciliation Act, 1996. There is no bar under the provisions of the Arbitration and Conciliation Act from applicability of the provisions of the Code of Civil Procedure, 1908 to the arbitration proceedings filed in court. Section 19 of the Arbitration Act provides that the Arbitral Tribunal shall not be bound by the Code of Civil Procedure, 1908. The said provision does not apply to the proceedings filed in court including arbitration application filed under section 34 or even appeal under section 37 of the Arbitration and Conciliation Act, 1996. I am thus not inclined to accept the submission of Mr. D'vitre, the learned senior counsel appearing for the appellants that right of filing cross objections also must be provided under section 37 of the Act and not having provided, cross objections would not be maintainable. In my view, sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Arbitration and Conciliation Act, 1996 for maintainability of cross objections. Supreme Court in case of S. Nazeer Ahmed (supra) and Ravinder Kumar Sharma (supra) has held that for supporting the decree passed by the trial court, it is not necessary for the respondent in the appeal, to file a memorandum of cross objections challenging a particular finding that is rendered by the trial court against him when the ultimate decree itself is in his favour. It has been held that memorandum of cross objections is needed only if the respondent claims any relief which had been negatived to him by the trial court and in addition to what he has already been given by the decree under challenge. 93. In my view, it is open to the respondents even if he has not filed any cross objections with respect to the portion of the impugned order which has gone against him while opposing the appeal filed by the opponent against such order a contention which if, the learned judge would have accepted would have necessitated of the setting aside of the entire award but that order so far as it was against him would stand. The respondents can without filing cross objections canvass the correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Supreme Court. In that context, it is held by the Supreme Court that the original appeal filed by the respondents itself was found to be not maintainable as not covered by any of clause (i) to (vi) of sub section 1 of section 39 of the Arbitration Act, 1940 which was dismissed as incompetent, the question of memo of appeal filed by the applicant being treated as cross objections and being taken up for hearing on merits did not arise. On perusal of the said judgment, it is clear that there was no issue before the Supreme Court as to whether respondents could challenge adverse findings of fact by filing cross objections in case appeal under section 39 of the Arbitration Act, 1940 was maintainable under any of the clause (i) to (vi) of sub section 1 of Section 39 of the Arbitration Act, 1940. No reliance was placed on explanation inserted in sub rule 1 of Order 41 Rule 22 of the Code of Civil Procedure, 1908. In my view the facts before the Supreme Court in case of Municipal Corporation of Delhi and others (supra) are clearly distinguishable with the facts of this case. Reliance thus placed by Mr. D'vitre on the judgment of Supreme Court in case of Municipal Corporation of Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed by the respondents. 99. On merits of cross objections Mr. Kamdar canvassed two submissions which are recorded in paragraph 48 of the aforesaid judgment. As far as submission of Mr. Kamdar that findings of the learned District Judge that arbitrator had jurisdiction to decide regarding three properties was incorrect has no merits. Even the respondents in their written statement had repeatedly asserted that the arbitrator had jurisdiction to decide all the disputes and differences between the parties. The learned District Judge on interpretation of the agreement and mandate had rightly taken a view that the learned arbitrator had jurisdiction to decide the dispute also in respect of individual properties of the family members. I am thus not inclined to accept that the said findings of the learned District Judge was faulty and/or warrants any interference in this cross objections. 100. Mr. Kamdar, the learned senior counsel appearing for the respondents laid emphasis more on the issue that the learned arbitrator had become functus officio on signing the award under section 31(1) of the Arbitration and Conciliation Act, 1996 and could not have made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned arbitrator was in process of correcting few mistakes in the impugned award. It is not the case of the respondents that the learned arbitrator had directed Mr. Sodhi first to show the impugned award to Mukesh or to consult him for making any corrections. 102. Question that arises for consideration of this court is whether arbitrator become functus officio on the date when copy of the award was first signed by the learned arbitrator by putting the date of 25th July 2007 and Mr. Sodhi showing a copy thereof to Mukesh. Question also arises whether learned arbitrator has carried out corrections in the award contrary to section 33 and has committed misconduct or was biased. 103. Under section 31 of the Arbitration Act, an award is made when it is signed by the arbitrator. Section 31 provides for the form and contents of the arbitral award. Section 31(4) provides that the arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place. Section 31(5) of the Act provides that after the arbitral award is made, a signed copy shall be delivered to eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrection is made under section 33(1)(a) by the parties till an order thereon is passed by the learned arbitrator within the time prescribed or if arbitrator exercises suo motu powers for correction till such period expires or if any request is made by parties for additional award till such additional award is made within the time prescribed under section 33(5) and extension if any under section 33(6). If court passes an order under section 34(4) by adjourning the proceedings, on a request made by the party in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award, arbitration proceedings revive for such limited purpose. In my view, the arbitral tribunal thus does not become functus officio after making an award for such time prescribed under section 33 for correcting any computation error clerical or typographical error or any other error of the similar nature occurring in the award or giving interpretation part of a specific point or part of award as requested by the parties, making an additional award on request of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying out such corrections which were of clerical in nature as provided under section 33(1)(a) of the Arbitration Act. In my view, no malafide or bias can be imputed by the respondents against the arbitrator on the basis of such corrections of clerical nature carried out by the learned arbitrator in the impugned award. None of the allegations of the bias were accepted by any of the learned District Judge while deciding application filed under section 34 of the Arbitration Act by the respondents. In my view, award in respect of which no fault can be found could not have been set aside by the learned District Judge. I am not inclined to accept the submission of Mr. Kamdar, the learned senior counsel appearing for the respondents that on this ground also the award ought to have been set aside by the learned District Judge. In my view, the view expressed by the former Judges of this Court in their treaties on Arbitration and Conciliation Act, 1996, on this issue relied upon by Mr. D'vitre are correct. 109. As far as judgment of the Supreme Court in case of Rikhabdass (supra) relied upon by Mr. Kamdar is concerned, Supreme Court has set aside the order passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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