A Division Bench of Justice Mukta Gupta and Justice Neena Bansal Krishna was of the view that the Arbitrator in the present case failed to apply the basic fundamental law contained in the Limitation Act, 1963 and the Transfer of Property Act, 1882. It was also held that the same was not in consonance with judicial principles and decisions laid down by the courts of India, thus the appeal instituted by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 read with Section 13 of Commercial Courts Act, 2015 against the impugned judgement and order dated February 1st, 2022 was dismissed.
The present appeal was preferred by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 read with Section 13 of Commercial Courts Act, 2015 against the judgment and order February 1st, 2022 whereby the objections of the first respondent under Section 34 of the A&C Act, 1996 against the award dated March 2, 2020, were allowed and it was held that late Smt. Kalyani Roy was the absolute owner of the property in respect of which she entered into a collaboration agreement with the first respondent Shri. Sandeep Soni.
The conspectus of facts was that Shri Subhash Chand Roy, deceased father of the appellant and of the respondents; second to four was the absolute owner of a property located in Delhi. He executed a will dated March 15, 1988, bequeathing the suit property in favor of his wife. He died on January 30, 1991 and was survived by his wife Smt. Kalyani Roy and the children i.e. the appellant and respondents- two to four.
Thereafter, Smt. Kalyani Roy also executed a will on March 30, 2016 wherein she bequeathed the suit properly equally to the appellant and the respondents- two to four. Smt. Kalyani Roy died on January 1, 2017. During her lifetime she entered into a collaboration agreement dated August 9, 2016 with the first respondent as the owner of the suit property.
The allocation of specific floors as well as schedule of payment was defined in the Collaboration Agreement. An amount of Rs.25, 00,000/-was also paid to Smt. Kalyani Roy by respondent no.1 in terms of the Collaboration Agreement. A Deed of Extension was entered into on October 27, 2016revising the date of completion as April 30, 2017.
The cause of dispute arose with respect to the aforesaid agreement. The appellant was aggrieved by the same on the ground that Smt. Kalyani Roy was residing with Smt. the second respondent, however, her name was not present in possession of the property nor did she have any ownership right in the suit property. It was further the case of the appellant that the entire agreement was manipulated by the second respondent along with her husband. In pursuance of the same, the appellant sent a legal notice dated December 10, 2016 to second respondent and her husband Mr. P.K. Sarkar as they were executors of the will of Late Subhash Chand Roy, who instead of getting the Will probated, conspired with the other respondents and sold the property taking undue advantage of Smt. Kalyani Roy.
Thereafter, the appellant filed a suit for injunction. He was granted an interim order. Consequently, an application was instituted by the first respondent under Order 39 Rule 4 of CPC for setting aside the interim order. Also amid the given circumstance, an application was also filed under Section 11 of the Arbitration and Conciliation Act, 1996 by the first respondent. Subsequently, the appellant also filed a suit for declaration of Collaboration Agreement and the Supplementary Agreement to be null and void. Thus, the parties were referred to arbitration.
In view of the same, the award was granted by the Arbitrator dated March 2 , 2020. The same was assailed under Section 34 of the Act, 1996 by the first respondent. The objections raised were allowed by the Single Judge through impugned judgment dated February 1, 2022 and it was observed that the second part of the Will of Shri Subhash Chand Roy, though appears to be contradictory to the first part, is easily reconcilable.
Aggrieved by the order, the present appeal was filed by the appellant under Section 37 of the Act, 1996.
After hearing the submissions, the short question that was posed for consideration before the Court was whether Smt. Kalyani Roy had acquired an absolute interest or life interest by virtue of the Will dated March 15, 1988 executed in her favor by her husband.
To answer the same, the Court analyzed the contents of the Will. It further relied on the judgment of the Apex Court in the case of Shyamal Kanti Guha vs. Meena Bose wherein it was explained that in cases where the two Clauses of the Will are inconsistent and irreconcilable to each other, if it is possible to give effect to both the clauses which apparently appear to be irreconcilable, the Court must take recourse thereto.
Additionally, it was observed that Smt. Kalyani Roy had an absolute interest which is also evident from the fact that on the demise of Shri Subhash Chand Roy she got the property mutated in her name for which the appellant as well as the respondents No, two to four submitted their No Objections before L&DO in the year 1994, acknowledging that their father had left a registered Will which was genuine, bequeathing the suit property in favour of Smt. Kalyani Roy and they were not disputing the title of Smt. Kalyani Roy to the property and that they had no objection to mutation of the property in her name.
It was further held by the Court that the appellant himself had given No objection in favor of Smt. Kalyani Devi and was always in the knowledge of the Conveyance Deed and any challenge now to the ownership/ title of Smt. Kalyani Devi acquired by her by virtue of Conveyance Deed, is clearly time barred. The appellant took no steps to assert his rights at any point of time. In these circumstances, the supervening equity in favor of the respondents estops and bars the appellant from opposing the title of Smt. Kalyani Devi in the property in question, the Court noted. It is pertinent to note that even in the present proceedings the Conveyance deed was executed in favor of Smt. Kalyani Roy, the Court submitted.
It was also noted by the Court that the limitation for challenging the Deed is three years as per Article 59 of the Limitation Act and per Section 27 of the Limitation Act right to sue for recovery of possession of immovable property is extinguished upon expiration of the period of limitation provided, the Court noted.
Next question that was posed for consideration was whether it was within the scope of Section 34 to upset the findings of the Arbitrator. In view of the same, the Court observed that Section 34 of the Act, 1996, provides the ground for setting aside the domestic arbitral award if it is in conflict with public policy of India.
In view of the same the decision of Renusagar Power Co. Ltd. v. General Electric Co, was referred wherein the expression public policy in the context of Foreign Award was construed by the Apex Court and it was held that an award which is in violation of the statute enacted to safeguard the national interest, shall be contrary to the public policy of India and the fundamental policy of Indian law. The same finding was reiterated in the case of Associate Builders v. DDA.
Reverting back to the facts of the present case, the Court opined that the Arbitrator failed to apply the basic fundamental law contained in the Limitation Act, 1963 and the Transfer of Property Act, 1882. It was also held that the same was not in consonance with judicial principles and decisions laid down by the courts of India. Thus,
it was observed that no interference was required in the judgment
passed by the Single Judge. Accordingly, the appeal was dismissed.
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