1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMER SUMMONS NO. 13 OF 2009 IN EXECUTION APPLICATION (L) NO. 461 OF 2008 IN AWARD DATED 20TH OCTOBER 2005 Mr. Peter A. D'Souza .. Applicant Vs B. Balakrishna Hegde & Ors .. Respondents And Shilpa Co-op Housing Society Ltd .. Respondents Mr. Raj Patel i/b Ms Kavita Gandhi for the Applicant Mr. A.Y. Sakhare, Sr. Adv with Mr. M.U.Pandey for the added Respondent Mr. S.K. Chorasiya with Ms Seema Gupta i/b A.M. Sarogi for the Respondent CORAM : DR. D.Y. CHANDRACHUD, J DATE : 24th APRIL, 2009. P.C.: 1. The Chamber Summons reflects a serious misuse of the process of the Court and a misuse of the provisions of the Arbitration and Conciliation Act, 1996. The manner in which the proceedings before the Court have been sought to be utilized leaves much to be desired both in regard to the role of the parties and the Advocates who have drafted their pleadings. 2. A few facts would be in order : The Chamber Summons has been take out in an Execution Rma CHS1309240409.sxw 2 application which seeks enforcement of an alleged arbitral award dated 20th October 2005. The relief that has been sought in the Chamber Summons is for restraining a co-operative housing society which is impleaded as a Respondent to the Chamber Summons, by an order of injunction, from creating third party rights and / or developing the property of the society, bearing CTS No. 134 at Andheri “without safeguarding and protecting and preserving the rights of the Applicant to the extent of premises ad measuring 2152 sq ft on the plot of land”. 3. The case of the Applicant to the Chamber Summons is that on 23rd October 1981, he had entered into an agreement for the sale of premises ad measuring 2152 sq ft with M/s Shilpa Developers, a partnership firm. The 1st Respondent -B.Balkrishna Hegde and the 2nd Respondent – Milind R. Khanalkar are stated to be partners of the firm. In Paragraph 3 of the affidavit in support of the Chamber Summons, it has been stated that “in view of disputes and differences”, the matter had been referred to an Arbitrator and “ necessary award came to be passed by the Arbitrator”. The Arbitral award is alleged to have been passed on 20th October 2005. According to the Applicant, the award has not been challenged and therefore has become executable. The Applicant states that he came across a public notice dated 8th July, 2008 issued by the co-operative Rma CHS1309240409.sxw 3 society proposing to develop the property. Correspondence ensued between the Advocates thereafter. 4. In sum and substance, the submission is that the Applicant has an arbitral award in his favor against Shilpa builders and its two partners. Hence, the co-operative society (which is not a party to the arbitral proceedings) be restrained from carrying on work of development. 5. Affidavits have been filed in the Chamber Summons and by consent, the Chamber Summons is taken up for hearing and final disposal. 6. The Award of which execution has been sought is of an arbitrator by the name of Shri. Ashok Agarwal. Since a former Judge of this Court also bears the same name, parties have upon instructions clarified that the person who has passed the award is a different person who resides in Bhayander. The arbitral award ( a copy of which is annexed at Exhibit B) is typed on a stamp paper dated 29th November 2008 purchased in the name of the Applicant. The award states in the cause title that it is “BEFORE THE LEARNED ARBITRATOR SHRI. ASHOK AGARWAL” below which there is a reference to “Arbitration case No...... of 2005”. The case number is left blank. The person who has prepared the document was evidently Rma CHS1309240409.sxw 4 unaware of the fact that in an arbitral award,there is no occasion for a case number to be assigned as in a Court of Law. Paragraph 1 of the Arbitral Award recites that on 13th December 2004, the Applicant had approached him to act as a sole arbitrator relying on an agreement dated 23rd October 1981 between him and the Respondent. The alleged arbitrator observes that “ since the said agreement do not contain any clause for Arbitration,I had looked into further documents which in clear terms show an admit and consent given by the Respondents accepting me to act as a Sole Arbitrator”. Parties are stated to have agreed that they shall argue the matter by presenting documents. The award records that the Respondents stated that due to circumstances beyond control, they are unable to comply with their part of the obligation though “they are trying their level best to do so”. The Award proceeded on the conduct of the Respondents and the admission made by them during the course of discussion which, according to the Arbitrator, would in “clear terms show that the Respondents are in process of making some under hand dealing with the society concerned and get the said property redeveloped considering the market position” . By the award, following directions have been issued to the the Respondents : “ a. The Respondents are hereby directed to take necessary steps for getting an additional FSI to the extent of 2152 sq ft on the said plot of land bearing CTS No. 134, Survey No. 72, 74 Chakala Rma CHS1309240409.sxw 5 Andheri,Mumbai – 400 093 either for carrying construction upon place or on the existing building as may be permissible under the provisions of law and put the Claimant in possession on payment of balance amount due and payable under the Agreement dated 23rd October, 1981. b. It is further directed that in case, if the Respondents intend to redevelop the said property and/or convey the said property they have to make provisions entitling the claimant to get in respect of an area admeasuring 2152 sq ft either in the newly constructing building to be developed upon the said plot of land and/or in alternate, the Respondent shall by getting necessary further FSI in the nature of TDR and/or in the nature as may be permissible thereof to the claimant subject to claimant making payment of balance consideration as may be found due and payable under the Agreement.” 7. The award is purportedly dated 20th October 2005. However, the stamp paper on which the award has been typed is dated 29th November 2008. The same date is also franked on the stamp paper. At the foot of the award, the arbitral award states as follows : “Note: Though, the aforesaid award has been passed by me on 20th October, 2005, none of the parties had approached me for getting the copy of the said award engrossed on the stamp paper, however, today, the claimant had approached to me with a request to furnish the copy of the said award and accordingly, the same is made available on the stamp paper made available by the claimant”. Rma CHS1309240409.sxw 6 The arbitral award, therefore, purports to state that it was made on 20th October 2005. However, parties had not approached the arbitrator for obtaining the copy of the award until 29th November, 2008 and accordingly, the same has been made available by the arbitrator on that date. 8. During the course of hearing, the Applicant's Advocate was called upon to take instructions on whether he is in a position to produce the arbitration agreement or any minutes of meeting before the arbitrator. This has been recorded in the order of the Court dated 3rd April, 2009. The Applicant has in his affidavit stated that the arbitrator is known to him, and to the Respondents and to the Advocates for the Respondents. Moreover, it is stated that the arbitrator had been a Petitioner in a matter where the same set of advocates had been appearing for one of the Respondents. The Applicant states that he has never bothered to obtain the minutes of the meeting and now upon inquiry being made with the arbitrator, he is informed that the after the award was issued on stamp paper, the Arbitrator had disposed of the proceedings having realized that they would not be required by him. No original record of the arbitral proceeding is therefore, forthcoming before the Court and it has been conveniently stated that the arbitrator had destroyed everything. Rma CHS1309240409.sxw 7 9. The co-operative society which is sought to be injuncted from developing its property by the order that is sought in the Chamber Summons has filed an affidavit in reply stating that the award is collusive and fabricated and that the Applicant appears to have joined hands with the 1st Respondent – B. Balkrishna Hegde so as to impede the process of development of the property of the society. The learned counsel appearing on behalf of the society submits that the buildings of the society were completed in 1989 and the conveyance in favor of the society was executed on 24th March 2006. On 27th May 2008, the society entered into an agreement for redevelopment with a developer. A public notice was issued by the Advocates for the co-operative society in the newspaper on 10th July 2008. On 16th July 2008, Shri. Ashok Saraogi, Advocate purporting to act for Shilpa Builders addressed a reply to the public notice. The reply, at the first available opportunity, is completely silent on any arbitral award. The society responded through a letter on 20th July 2008. On 3rd August 2008, Mr. Saraogi addressed a letter on behalf of Shilpa builders and the 1st Respondent as a partner of the firm and for the first time purported to state thus : Rma CHS1309240409.sxw 8 “the matter was referred by the third party to an Arbitrator under the provisions of Arbitration and Conciliation Act, 1996 and even the Arbitrator had passed an award directing Shilpa Builders to carry out necessary construction and put the said third party in possession of the premises which came to be passed somewhere in the year 2005 or so.” The letter states that the arbitral award was passed somewhere in the year 2005 or so. Even the said letter is uncertain about the date of the alleged award. The alleged award as already noted earlier was as a matter of fact, signed on 29th November, 2008 and it is surprising, to say the least how a statement is made that the arbitral award is made in 2005 or so. A further letter has been addressed on 13th September, 2008 on behalf of the Applicant to the developer appointed by the Co-operative Society. The letter is silent about the arbitral award. On 19th November, 2008, the 2nd Respondent who was one of the partners of Shilpa builders addressed a reply specifically setting up the defence that for the first time in the year 2008, a claim was sought to be set up on the basis of an alleged agreement dated 23rd October, 1981. The alleged agreement and the alleged award of the arbitrator are stated to be forged and fabricated. 10. In the affidavit in reply that has been filed by the co-operative Society, detailed averments have been made in Paragraph 3 of the entire sequence of events and it has been sought to be contended that the award Rma CHS1309240409.sxw 9 is a fabricated document. Though a rejoinder has been filed, there is no specific traverse of what has been stated in Para 3 of the reply, save and except for the following statement : “I say that since the said award cannot be challenged by the present Respondents who are none-else but are claiming their rights through the original Respondents, I am not dealing with the entire contentions raised in the said para in detail and reserve my rights to comment upon the same as and when the matter is being heard on its merits and till such time, nothing shall be deemed to have been admitted by me in any manner whatsoever.” 11. The facts that have come before the Court demonstrate that an arbitral award allegedly of 2005 is sought to be set up much after a registered deed of conveyance was executed in favour of the co-operative society on 24th March, 2006. The alleged arbitral award was sought to be set up not at the first available opportunity when the Advocate for Shilpa Builders addressed a letter dated 16th July, 2008. It is in a letter dated 03rd August, 2008 that reference to the arbitral award is to be found. Then again, there is an ambiguous statement that the award came to be passed somewhere in 2005 or so. The arbitral award purports to have been made on 20th October, 2005 and it has been submitted that the award has been ante dated to a date prior to the execution of the registered deed of conveyance in favour of the society. As already noted above, the ante dating is obvious because the stamp paper on which the award is made is Rma CHS1309240409.sxw 10 dated 29th November 2008. An alleged agreement of 23rd October 1981 is the basis and foundation of the award. No arbitration agreement or minutes of meetings before the arbitrator are forthcoming. Evidently, limitation was not even set up as a defense though the alleged arbitral proceeding commenced 27 years after the date of the alleged agreement. The form and structure of the Arbitration and Conciliation Act 1996 have been palpably misused to set up a document with an object and intent to impede the rights of a third party namely, the co-operative society who was not a party to the alleged arbitral proceeding. The whole process of arbitration in the present case is sham. The present case is an instance of one where a palpably fabricated plea is sought to be set up to misuse the process of this Court in execution of a decree to affect the rights of a third party. Such conduct has to be deprecated in the strongest possible terms. It is unfortunate that pleadings solemnly affirming to the regularity of such proceedings have been filed in this Court. 12. The Chamber Summons will have to be dismissed and is accordingly dismissed. 13. The Applicant shall pay costs quantified at Rs. 10,000/- to the Shilpa Co-operative Housing Society Ltd. Rma CHS1309240409.sxw 11 (DR. D.Y. CHANDRACHUD, J) Rma CHS1309240409.sxw