KINNARI MULLICK AND ANOTHER Vs. GHANSHYAM DAS DAMANI

JUDGEMENT

(1.) This appeal raises a short question as to whether Sec. 34 (4) of the Arbitration and Conciliation Act, 1996 (for short "the Act") empowers the Court to relegate the parties before the Arbitral Tribunal after having set aside the arbitral award in question and moreso suo moto in absence of any application made in that behalf by the parties to the arbitration proceedings?

(2.) The Appellants, being joint owners of premises No.4 Wood Street, Kolkata, known as 4C, Dr. Martin Luther King Sarani, Kolkata, entered into two development agreements with the Respondent for a construction of a multi storied building. On completion of construction of the building sometime in 2003, the Appellants entered into a further agreement with the Respondent in terms of which the Respondent, for better enjoyment of the property, distributed the owner's allocation. In terms of the said agreement, the Respondent fully sold and transferred his share of the premises to various prospective buyers with proportionate area of the land to them as well as in common areas. According to the Appellants, the Respondent is not in possession of any portion of the suit premises. The Appellants have also executed and registered the conveyance along with the proportionate right in common areas and land of the said premises to various transferees, save and except two flats. The said agreement contained an Arbitration clause which reads thus:

(3.) The Respondent asserted that he was entitled to execution and registration of conveyance in respect of 50% built up area on the ground floor of such premises. That claim was rejected by the Appellants. The Respondent, through his advocate's letter dated 21.11.2009 addressed to the Appellants, inter alia informed them about the appointment of one Siddhartha Sankar Mandal, Advocate as arbitrator and further, that the said arbitrator would send intimation to the Appellants about the date, time and venue in respect of the arbitration proceedings to be held by him. The said letter, however, did not specify that Siddhartha Sankar Mandal was appointed as Sole Arbitrator nor did it call upon the Appellants to appoint their nominee arbitrator. The Appellants then received communication through Siddhartha Sankar Mandal dated 01.11.2009 stating that he has been appointed as arbitrator to arbitrate the dispute between the Appellants and the Respondent and that he would enter upon the reference on 10.11.2009. By this letter, the Appellants were called upon to remain present so as to hold a meeting as scheduled. According to the Appellants, the letter did not even provide for 30 days' time between the date of meeting and the receipt of the communication by the Appellants. Nevertheless, the arbitrator proceeded with the arbitration proceedings and held meetings. The Appellants did not file their statement of defence. Instead, they filed an application on 10.05.2010 before the arbitrator under Sec. 16 of the Act, inter alia challenging the composition of the Arbitral Tribunal and also raising the issue of jurisdiction to proceed with the arbitration as a Sole Arbitrator. The arbitrator, however, rejected the said application on 27.08.2010 by an interim award.