CRP No.676 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 27.01.2023
PRONOUNCED ON : 03.02.2023
CORAM
THE HON'BLE MR. JUSTICE G.K.ILANTHIRAIYAN
C.R.P. No.676 of 2013
and
M.P.No.1 of 2013
V.K.John .... Petitioner
Vs
1. S.Mukanchand Bothra & HUF (died)
Represented by Mukanchand Bothra
2. A.Philip
3. M.Karishma Bothra
4. M.Gagen Bothra
5. Sandeep Bothra
(Respondents 3 to 5 brought on records as
LRs of the deceased R1-S.Mukanchand Bothra
vide Court order dated 20.09.2021 made in
CMP No.15308 of 2019 in CRP No.676 of 2013) .... Respondents
Prayer: Civil Revision Petition filed under Section 115 of the Code of
Civil Procedure to set aside the final Award dated 21.02.2011 passed by
the “Arbitral Tribunal Consisting of sole Arbitrator Vedavalli Kumar” in
Arbitration No.1 of 2011 between respondents 1 and 2.
For Petitioner : Mr.Abraham Markos
for M/s.King and Partridge
For R1 : Died
For R2 : No appearance
For R3 to R5 : Mr.M.Gagen Bothra
Party-in-person
Case Citation: (2023) ibclaw.in 84 HC IBC Laws|
ORDER:
This Civil Revision Petition has been filed to set aside the final
Award dated 21.02.2011 passed by the “Arbitral Tribunal Consisting of
sole Arbitrator Vedavalli Kumar” in Arbitration No.1 of 2011 between
respondents 1 and 2.
2. The learned counsel appearing for the petitioner would submit
that the petitioner is the third party to the Arbitration Award passed by
the Arbitral Tribunal consisting of sole Arbitrator Vedavalli Kumar, in
Arbitration Award No.1 of 2011 between the respondents 1 and 2. It was
obtained by fraud and collusion by the respondents. The first
respondent initiated the arbitration proceeding as against the second
respondent claiming to be a person by name A.Philip and styled as the
legal representatives of the petitioner's uncle one Appu John. The said
Appu John had never appointed any legal representative by name
A.Philip. The sale agreement and the pronotes produced in the
arbitration proceedings also have been fraudulently created by the first
respondent by forging the signature of the late Appu John. The first
respondent never paid any amount to late Appu John.
3. He further submitted that the said Appu John is the petitioner's father's brother. He died on 28.07.2007. He was unmarried and had no
issues. The petitioner is the only surviving legal heir of the said Appu
John. The said Appu John had never appointed any legal representative
by name A.Philip, who is the second respondent herein. The arbitration
proceeding was initiated by the first respondent, in pursuant to the
agreement for sale dated 20.04.2007 said to have been executed by late
Appu John in favour of the first respondent, thereby agreeing to sell
Nungambakkam property admeasuring 8 grounds and 2338 sq.ft. for a
very meager sum of Rs.3,20,00,000/-. In fact, the said property never
belonged to late Appu John. It belonged to the grandmother of the
petitioner and she passed away in the year 1984. The petitioner's father
was her eldest son, who died in the year 1995. The petitioner had filed a
suit in C.S.No.423 of 1995 before this Court as against the said Appu
John and his aunt, for partition of the suit property. This Court had
passed an order of injunction, by an order dated 22.07.1996, in respect of
those properties. In the meanwhile, the said Appu John died on
28.07.2007. Therefore, the said Appu John had no title over the property
in order to execute any agreement for sale as claimed by the first
respondent herein. The petitioner had absolutely no knowledge about
the arbitration proceeding and only from the execution proceeding, when
an attempt was made to execute the Arbitration Award, the petitionercame to know about it through the counsel on record. The petitioner,
being third party to the arbitration proceeding, can very well challenge
the Arbitration Award under Article 227 of Constitution of India, since,
he is not a party to the arbitration proceeding, as a non-party is not
entitled to file application under Section 34 of the Arbitration and
Conciliation Act, 1996.
4. He also submitted that under Section 34 of the Arbitration and
Conciliation Act, 1996 provides for filing of an application to set aside
the Arbitral Award. Section 34(2)(a)(iii) provides that an arbitral award
may be set aside by the Court if the party making the application was not
given proper notice of the appointment of an arbitrator or of the arbitral
proceedings. Section 34(2)(b)(ii) provides that an arbitral award may be
set aside by the Court if the Court finds that the arbitral award is in
conflict with the public policy of India. The explanation goes on to
clarify that an award is in conflict with the public policy of India if the
making of the award was induced or affected by fraud or corruption or it
is in conflict with the most basic notions of morality or justice. The
present impugned award has been obtained by collusion and fraud, that
too, without notice to the petitioner and without adding the petitioner as
a party. Therefore, it is liable to be set aside.
5. Per contra, the fourth respondent Mr.M.Gagen Bothra,
appearing as party-in-person, on behalf of the respondents 3 & 5 herein
submitted that the Civil Revision Petition itself is not maintainable by
challenging an Arbitration Award on the ground that he is the legal
representative of the party with whom an agreement of sale was entered
by the deceased first respondent. There is a statutory right of appeal
available under Section 34 of Arbitration and Conciliation Act. As per
definition of 'party' under the said Act, it means a party to an 'arbitration
agreement'. The Arbitration Award is challenged only on the ground
that the said Appu John died and the petitioner is the sole surviving legal
heir. Therefore, the petitioner ought to have challenged the Arbitration
Award in the manner known to law and not under Article 227 of
Constitution of India. The Arbitration Award was passed on 21.02.2011,
whereas the present petition was filed in the year 2013, without any
condone delay petition. Only to escape from the delay, the petitioner
filed Civil Revision Petition under Article 227 of Constitution of India.
Where a statutory right to file an appeal has been provided for, it is not
open to entertain a petition under Article 227 of the Constitution of
India.
6. In support of his contention, he relied upon the followingJudgements :
(i) 2021 (1) CTC 450 in the case of Bhaven
Construction through Authorised Signatory Premjibhai
K.Shah Vs. Executive Engineer Sardar Sarovar Narmada
Nigam Ltd & Another
(ii) Appeal (Civil) No. 557 of 2003 in the case of
Sadhana Lodh Vs. National Insurance Company Ltd.,
(iii) Appeal (Civil) 1526 of 2007 in the case of
Ravi Prakash Goel Vs. Chandra Prakash Goel and
another.
(iv) CRP (NPD) No.316 of 2016 in the case of
Venkatachalam Vs. Supparayan
(v) CRP (PD) No.1734 of 2021 in the case of
V.C.Sethu Vs. Inderchand Kochar.
7. Heard, Mr.Abraham Markos, learned counsel appearing for
the petitioner, Mr.M.Gagen Bothra, Party-in-person/4
th
respondent/
appearing for respondents 3 and 5 and perused the materials available on
record.
8. Admittedly, the petitioner is not a party to the arbitration
agreement dated 20.04.2007. It was executed by one Appu John.
According to the petitioner herein, the said Appu John died as unmarried
and he had no issues. The petitioner is the brother's son of the said Appu John and he is the only legal heir of the said Appu John. In this
revision petition filed, challenging the arbitration award, under Article
227 of the Constitution of India, the two grounds emerged to decide that
are
(i) Whether the legal heir of a party to the agreement can challenge
the award as a third party under Article 227 of the Constitution of India ?
and
(ii) Whether the Arbitration Award can be challenged under
Article 227 of the Constitution of India when there is statutory right as
contemplated under Section 34 of Arbitration and Conciliation Act,
1996?
The petitioner challenged the Arbitration Award dated 21.02.2011 as
legal heir of the party with whom an agreement of sale was entered into
by the first respondent herein. The Arbitration award can be challenged
under Section 34 of the Arbitration and Conciliation Act, 1996. The
Arbitration Award can be set aside if it is filed by a 'party' making the
application to set aside the Arbitration Award. The 'party' means a party
to an 'arbitration agreement'. The petitioner challenged the Arbitration
Award as he is the sole surviving legal heir of the said Appu John. It is
relevant to extract the definition of the legal representative as per Section
2(g) read with Section 40 of the Arbitration and Conciliation Act, which is as follows :
Sections 2 : definitions
(g) “legal representative” means a person who in
law represents the estate of a deceased person, and
includes any person who intermeddles with the estate of
the deceased, and, where a party acts in a representative
character, the person on whom the estate devolves on the
death of the party so acting ;
Section 40 :
Arbitration agreement not to be discharged by death of
party thereto.
40 (1). An arbitration agreement shall not be
discharged by the death of any party thereto either as
respects the deceased or as respects any other party, but
shall in such event be enforceable by or against the legal
representative of the deceased.
(2) The mandate of an arbitrator shall not be
terminated by the death of any party by whom he was
appointed.
(3) Nothing in this section shall affect the
operation of any law by virtue of which any right of
action is extinguished by the death of a person.
9. Thus, it is clear that an arbitration agreement shall not be
discharged by death of any party and it shall not be terminated by death
of any party. It is also clear that the agreement can be enforceable by or
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Case Citation: (2023) ibclaw.in 84 HC IBC Laws| www.ibclaw.in
CRP No.676 of 2013
against the legal representatives of the deceased. A person, who has the
right to represent the estate of deceased person occupies the status of a
legal person. Section 35 of the Arbitration and Conciliation Act, 1996
which imparts the touch of finality to an arbitral award says that the
award shall have binding effect on the parties and persons claming under
them. Persons claiming under the rights of a deceased person are the
personal representative of the deceased party and they have the right to
enforce the award and are also bound by it. The arbitration agreement is
enforceable by or against the legal representative of a deceased party
provided the right to sue in respect of the cause of action survives. The
legal representatives of the deceased, where a party acts in a
representative character, the person on whom the estate devolves on the
death of the party so acting, can very well challenge the award under the
provision of the Arbitration and Conciliation Act, 1996. Admittedly, the
petitioner claims to be the legal representative of the said Appu John.
Therefore, he can very well, as a legal representative of the said Appu
John, challenge the Arbitration Award in the manner known to law.
10. The Arbitration Award passed by the sole Arbitrator has been
now challenged under Article 227 of the Constitution of India. It is not
maintainable when there is statutory remedy available under Section 34 of the Arbitration and Conciliation Act, 1996. It is relevant to extract
the provision under Section 5 of the Arbitration and Conciliation Act,
1996, which is as follows :
Section 5 : Extent of judicial intervention :-
Notwithstanding anything contained in any other law for
the time being in force, in matters governed by this Part,
no judicial authority shall intervene except where so
provided in this Part.
The non-obstance clause is provided to uphold the intention of the
legislature as provided in the Preamble to adopt UNCITRAL Model Law
and Rules, to reduce excessive judicial interference which is not
contemplated under the Arbitration and Conciliation Act, 1996.
Therefore, the petitioner cannot maintain this Civil Revision Petition,
under Article 227 of the Constitution of India,challenging the Arbitration
Award,
11. That apart, where a statutory right to file an appeal has been
provided for, it is not open to the petitioner to challenge the Arbitration
Award under Article 227 of the Constitution of India. That apart, the
Arbitration Award was passed on 21.02.2011. The present Civil
Revision Petition had been filed on 04.10.2012. The petitioner ought to
have challenge the Award within a period of three months from the date
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Case Citation: (2023) ibclaw.in 84 HC IBC Laws| www.ibclaw.in
CRP No.676 of 2013
of Award. Therefore, in order to escape from the delay, the petitioner
challenged the Arbitration Award under Article 227 of the Constitution
of India. Therefore, it is not maintainable and liable to be dismissed.
12. Accordingly, this Civil Revision Petition stands dismissed.
Consequently, connect miscellaneous petition is closed. There shall be
no order as to costs.
