TMI Blog2007 (3) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant herein moved an application under section 20 of the Act for appointment of a new arbitrator. Taking into account the above circumstances, we set aside the ex parte Order dated 31.5.2006 passed by the trial court at Faridabad making Award dated 29.3.1994 the rule of the court. Consequently, we direct restoration of the matter to the file of the Court of Additional Civil Judge (Senior Division), Faridabad in Case No. 7 instituted on 12.4.1994 titled M/s Chopra Land Developers Pvt. Ltd. v. Jatinder Nath and anr. The trial court will re-examine the question on merits as to whether the Award given by the arbitrator on 29.3.1994 should or should not be made the rule of the court. The trial court will have to decide whether to extend the period for making the Award or not, whether to supercede the reference or not. The trial court will proceed in accordance with law. Any observation on the merits of the case mentioned herein above shall not be treated as opinion of this Court. Further, the trial court will proceed on the basis that it has territorial jurisdiction to decide the above matter. Appeal dismissed. - C.A. 1134 OF 2007 - - - Dated:- 2-3-2007 - S. H. Kapadia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on 20.2.1994. Since the entire matter was pending before the Delhi High Court which was moved by the appellant herein under section 20, the arbitrator was requested not to proceed. Despite the request, the arbitrator proceeded to give his Award (ex parte). This was on 29.3.1994. To complete the chronology of events, it may be pointed out that the Developer (first respondent herein) filed an application under section 14 of the Act for filing the Award in the court of Additional Civil Judge (Sr. Div.), Faridabad (for short the trial court ). Notice of the said application was also given to the appellant herein. The appellant herein appeared and filed his objections. He objected to the jurisdiction of the trial court. According to the appellant, the suit land stood located in Saket, New Delhi and, therefore, the trial court had no jurisdiction to pass the decree in terms of the said Award. This was the basic objection raised by the appellant before us. Apart from his objection on territorial jurisdiction, the appellant also submitted before the trial court that the Arbitrator had issued notice dated 24.8.1992 fixing the date of hearing on 5.9.1992. However, when his advocate r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court alone had the jurisdiction to decide the above dispute. The trial court also rejected the contention of the Developer that on the date of execution of the agreement, the appellant herein was residing in Faridabad. On the merits of the case, the trial court found that the appellant herein had moved a petition under section 20 of the Act on 14.10.1993 in the Delhi High Court which was registered as Suit No. 2482/93 wherein it was prayed that an independent arbitrator be appointed and the matter be referred for arbitration. On 14.10.1993 the Arbitrator had not made the award. On 14.10.1993 the period of four months had expired. The trial court found that after the institution of petition under section 20 of the Act on 14.10.1993, the arbitrator, suddenly, after a lapse of almost fourteen months from the date of his entering upon the reference, made an ex parte Award against the appellant on 29.3.1994. According to the trial court, though the agreement (Ex. P-1) stood executed at Faridabad, the validity of that agreement and the dispute arising therefrom have to be decided in the civil court at Delhi since the property in question stood located in Saket, New Delhi. According to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell within the purview of section 31(4) of the Act. According to the trial court, since a petition under section 20 of the Act was pending prior to 12.4.1994 in the Delhi High Court, the Developer should have moved his application under section 14 also before the Delhi High Court. In this connection reliance was placed on the judgment of this court in the case of Union of India v. Surjeet Singh Atwal reported in AIR 1970 SC 189. Aggrieved by decision of the trial court dated 24.9.1996, the Developer moved the Delhi High Court by way of the CRA. In the CRA the Developer contended that under the agreement (Ex. P-1) vide clause 21 it was agreed between the parties that the Faridabad courts alone shall have the jurisdiction in case of any dispute between the parties and, therefore, the trial court had territorial jurisdiction to entertain and try application dated 12.4.1994 under section 14 of the Act. It was contended, in the alternative, that where two courts have concurrent jurisdiction, the parties by agreement can choose the jurisdiction of one of them and such a choice was not against the public policy. It was contended that an agreement whereby jurisdiction of the court stood sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led for in the CRA. By the impugned judgment, the High Court held that Delhi High Court was not a competent court as the parties had chosen to confer exclusive jurisdiction upon the Faridabad court. In the circumstances, section 31(4) of the Act was not applicable. The High Court further held that there was no waiver on the part of the Developer by invocation of the jurisdiction of the Delhi court when the respondent instituted Suit No. 945/92 for permanent injunction. The High Court held that Suit No. 945/92 had no correlation with the arbitration matter. The High Court further held, that on the facts and circumstances of the present case, section 20 CPC was applicable; that section 20 CPC refers to institution of suits other than those covered by section 16 CPC on the basis of residence of defendant or cause of action. In the circumstances, the High Court allowed the Revision Petition holding, that the trial court at Faridabad had jurisdiction to entertain and try application dated 12.4.1994 under section 14 of the Act; that section 31(4) of the Act was not attracted; that the arbitrator had entered upon reference on the application of appellant herein and, therefore, there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Learned counsel urged that both the parties were aware that the dispute was in respect of the suit property located at Saket in New Delhi. The dispute, according to the learned counsel, was for possession of the suit property. The appellant herein had sought possession of the suit property even before the arbitrator. The Award of the arbitrator, according to the learned counsel, itself indicates that the arbitrator has given relief in favour of the Developer concerning immovable property and, therefore, the trial court was right in coming to the conclusion that the application made on 12.4.1994 under section 14 by the Developer was not maintainable on the ground of territorial jurisdiction in view of section 31(4) of the Act. The second contention advanced on behalf of the appellant before us was that the impugned Award dated 29.3.1994 was non est. According to the learned counsel, four months time available to the arbitrator under clause 3 of Schedule I read with section 3 of the Act expired on 24.12.1992.After that date the arbitrator became functus officio. In the circumstances, the appellant herein filed an application under section 20 of the Act on 14.10.1993 before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construct the housing complex. This was in addition to the construction cost to be incurred by the Developer. Clause 16 of the agreement stated that in consideration of the Developer's services to construct the housing complex, the appellant agrees to allow the ownership of the basement, ground floor and mezzanine along with proportionate interest in the land to be transferred in the name of the Developer. At this stage, it may be noted that under the ex parte Award dated 29.3.1994 the arbitrator has passed his Award in terms of para 16 and, therefore, it was contended before us on behalf of the appellant that the dispute related to possession of the property; that the dispute was comparable to a suit for land and that the submission was made specifically in view of the Award being passed in terms of para 16 of the agreement (Ex. P-1). It was urged that since the arbitrator has passed the Award directing the appellant to transfer the ownership of basement, ground floor, mezzanine along with the proportionate interest in the land in favour of the Developer, the present dispute related to recovery of possession and since the lands were located in Saket the trial court had no juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property, the court having jurisdiction in respect of the same will entertain an application under section 14. In order to decide as to which court has jurisdiction to entertain a petition under section 14, reference has to be made to section 2(c) read with section 31(1) of the Act. Merely because the arbitrator chooses to hold the proceedings in a place where no suit could be instituted, and chooses to make an award at that place, it would not give the court of that place territorial jurisdiction to decide the matter under the Act. Section 30 refers to ground for setting aside an award. Section 30 is to be read with section 33. The idea behind the entire scheme of the Arbitration Act appears to be that an application by a party challenging the validity of correctness of the award on whatever ground has to be made under section 33. Section 33 is the only section under which a party is given the right to apply to the court to challenge either the agreement or the award. Under the Act, therefore, after the Award has been filed a party is permitted to make an application under section 33 to bring all kinds of defects to the notice of the court and the court will give reliefs either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that this case is similar to a suit for land. One cannot look at para 16 alone in isolation. On the other hand, with open eyes, the parties had entered into the contract, they had agreed to refer all disputes to an arbitrator at Faridabad and they had agreed that the Faridabad court alone shall have jurisdiction. In a matter of this kind, it cannot be said that the claim is similar to a suit for land. A housing complex has to be constructed at the site. When dispute arises, it will not be confined only to immovable property. Such disputes also require accounts to be maintained. The disputes also involve rendition of accounts. In the circumstances, in our view, section 20 CPC alone is attracted. Therefore, in our view, the High Court was right in holding that the Faridabad court had jurisdiction to make the Award the rule of the court. As stated above, one of the points raised on behalf of the appellant herein is that ex parte Award dated 29.3.1994 was non est since it was made beyond four months from the date when the arbitrator entered upon the reference. We do not find any merit in this contention. Chapter II of the Arbitration Act covers references, in which the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties. Such an award is vitiated as the arbitrator has no power to make an award after four months. However, a bare failure of an arbitrator to make an award within the time allowed by law will not involve the consequences of it being set aside only on that ground. The court has ample powers in a given case to extend the time and give life to the vitiated award by exercising judicial discretion under section 28 of the Act. An application to have the award set aside on the ground that it was made beyond time prescribed has to be moved under the Act. No separate suit would lie for that purpose. Section 28 is not limited only to references to arbitration made in a suit pending before the court. Further, the power given to the court under section 28 is so wide that it can extend the time even if the award is made beyond four months from the date of the arbitrator entering upon the reference. The only restriction is that it must be exercised with judicial discretion. In the present case, as state above, the Developer moved an application for making the award the rule of the court on 12.4.1994. Unfortunately, the appellant chose not to appear before the trial court. In the circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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