M/S Umesh Goel vs Himachal Pradesh Cooperative Group ...

The facts are not in controversy which can be briefly stated as under:

02.02.1999. It is stated that there was some delay in getting the plan sanctioned, which according to the appellant, he was not responsible for the delay. A dispute arose as between the appellant and the respondent which necessitated the appellant to move the High Court of Delhi by way of an application under Section 9 of the Arbitration and Conciliation Act 1996 (for short “1996 Act”) to restrain the respondent from dispossessing the appellant from the worksite till the work executed by the appellant is measured by the Commissioner to be appointed by the Court. It was filed on 22.05.2005. A Commissioner was also appointed by the High Court. The appellant filed another application under Section 9 of the 1996 Act to restrain the respondent from operating its bank accounts and from dispossessing the appellant on 29.01.2003.

With reference to the dispute which arose as between the appellant and the respondent an arbitrator/an advocate by name Smt. Sangeeta Tomar was appointed by the respondent to adjudicate the dispute between them. As the appointment came to be made on 17.03.2003 by the respondent, though, the appellant earlier moved the High Court by way of an Arbitration Application No.145 of 2003 on 09.07.2003 under Section 11(5) of the 1996 Act for appointment of an independent arbitrator, the same was subsequently withdrawn. The appellant participated in the arbitration proceedings before the arbitrator appointed by the respondent. Claims and counter claims were made by the appellant as well as the respondent before the arbitrator. The arbitrator passed the award on 05.05.2005 wherein the claim of the appellant was allowed to the extent of Rs. 1,36,24,886.08 along with interest at the rate of 12% from 01.06.2002 till the date of the award and further interest from the date of award till its payment at the rate of 18% per annum. While resisting the claim of the appellant, the respondent did not specifically raise any plea under Section 69 of the Partnership Act.

The respondent challenged the award dated 05.05.2005 under Section 34 of the 1996 Act before the Delhi High Court which was registered as A.A. No.188 of 2005. The said application was filed on 02.08.2005. The respondent’s application was dismissed by the learned Single Judge by an order dated 01.09.2005. The respondent filed Review Application No.26 of 2005 which was also dismissed by the learned Single Judge by an order dated 03.10.2005. As against the orders dated 01.09.2005 and 03.10.2005, the respondent preferred appeals in FAO (OS) No.376 of 2005 on 14.11.2005. Pending disposal of the appeals, an interim order was passed on 21.07.2006 directing the respondent to deposit 50% of the decretal amount within six weeks and by subsequent order dated 18.08.2006 the time was extended by another four weeks. By the impugned order dated 20.11.2007 the Division Bench having allowed the FAO(OS) No.376 of 2005, the appellant is before us.

In the case on hand, the contract between the parties contained an Arbitration Clause. The respondent invoked the said clause and an Arbitrator came to be appointed. After the respondent filed its statement of claim, the appellant filed its reply and also its counter claim dated 30.08.2003. Before the Arbitrator, in the course of oral arguments, a faint attempt was made contending that, the appellant-firm being an unregistered one, by virtue of Section 69 of the Partnership Act, the proceedings insofar as the counter claim was concerned, the same was not maintainable and should be rejected. The Arbitrator took the correct view that Section 69 has no application to the proceedings of the Arbitrator and held that the objection of the respondent was not sustainable. The Arbitrator allowed the counter claim to the extent of Rs.1,36,24,886/- (Rupees One crore thirty six lacs twenty four thousand eight hundred eighty six only). When the award of the Arbitrator was challenged by the respondent under Section 34 of the Act, the very same objection was raised as a ground of attack. The learned Single Judge of the High Court also found no merit in the said contention and upheld the award of counter claim.

June 29, 2016.