PAMELA WASAN Vs. OMPRAKASH SATYAPAL CONTRACTORS

JUDGEMENT

(1.) HEARD on I.A. No. 1/07, application for taking additional facts on record, which is supported by an affidavit. Not opposed. The application is allowed. The applicants have preferred this application under Section 11(6) of Arbitration and Conciliation Act, 1996 (for brevity 'the Act of 1996') for appointment of arbitrator as per arbitration clause of the dissolution deed of partnership to resolve the dispute arisen between the parties with the averments that the original applicants i.e. Kewal Krishna Wasan and Virendra Kumar Wasan were partners of the Firm of non-applicant No. 1, which came into existence in the year 1963-64 with Satyapal Wasan, Kewal Krishna Wasan and Virendra Kumar Wasan and others as its partners. The partnership deed (in short 'the deed') was modified on 1st April 1992 when Shri Naresh Wasan and Smt. Shyama Wasan were included in the Firm as partners. The deed was executed between the partners on 27.4.2000, which came into force w.e.f. 1st April 2000 whereby partners of the above Firm mutually agreed to dissolve the partnership business by retiring the applicants from the said Firm and the assets and liabilities of the Firm were to be taken over by the remaining partners with mutual consent of the parties. The deed contained an specific clause No. 14, which provided that any difference of opinion regarding dissolution of partnership or regarding the interpretation of any clause, will be referred to arbitration or UMPIRE and decision of the UMPIRE shall be final and binding on all the parties and their legal representatives. In view of the above arbitration clause when Shri K.B. Gorha was nominated arbitrator by Kewal Krishna Wasan for adjudication of the dispute as his claim dated 29.12.2000 remained unresolved, the proposal was accepted by all the parties and the arbitrator, so appointed, proceeded with the arbitration proceedings and on 28th August 2001 an award for a sum of Rs. 5,00,000/-, which was withheld and kept in Firm, was made by the arbitrator.

(2.) THE applicants being aggrieved by the above award challenged the same by filing a petition under Section 34 of the Act of 1996 for setting aside the award before the Learned District Judge, Korba and the District Judge vide order dated 29th March 2005 of Annexure A/2 set aside the award. THEreafter, Late Krishna Kumar Wasan vide notice dated 15.1.2007 called upon the non-applicants to propose the name of an arbitrator as per Clause 14 of the deed within a period of 30 days from the receipt of the notice. However, since the non-applicants failed to act as directed, the instant petition was filed. A subsequent application for taking additional facts on record has been filed and it has been pleaded that the non-applicants sent notice of Annexure A/4 whereby they expressed their disagreement to the appointment of Shri K.B. Gurha as sole arbitrator and the sole arbitrator in its award of Annexure A/5 has mentioned this fact that the non-applicants did not consent to his appointment. THE applicants moved an application of Annexure A/6 under Section 34 of the Act of 1996 for setting aside the award dated 28th August 2001 and accordingly, the Learned District Judge has set aside the award.

(3.) RELIANCE is placed on the order passed by this Court in the matter of M/s P.D. Maheshwari v. South Eastern Coalfields Ltd. and Anr. M.C.C. No. 60 of 2003, Dharma Prathishthanam v. M/s Madhok Construction Pvt. Ltd. : AIR 2005 SC 214, Shree Ram Mills Ltd. v. Utility Premises (P) Ltd. : (2007) 4 SCC 599, Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd. : (2003) 5 SCC 705, Macdermott International Inc. v. Burn Standard Company Ltd. and Ors. : (2006) 11 SCC 181. The non-applicants have not filed any reply to this petition. However, it was argued that from the averments in the petition it would be evident that Kewal Krishna Wasan and Virendra Kumar Wasan stood retired from the Firm w.e.f. 1.4.2000 with the mutual consent of the erstwhile partners and they or their successors did not have any right in the movable and immovable properties of the Firm or Satyapal Wasan. Clause 14 of the deed provides for reference of any dispute regarding dissolution of the partnership or regarding interpretation of any clause. The applicants themselves proposed sole arbitrator for referring the alleged dispute arising out of the deed and the same was accepted by all the parties to the dispute and the arbitrator with the consent of all proceeded with the arbitration proceedings and ultimately, an award was made by the said arbitrator. However, the applicants challenged the award by filing application under Section 34 of the Act of 1996 before the Learned District Judge and the same was set aside as the non-applicants in their reply also prayed for setting aside the award. After filing of the petition, the applicants have come up with an entire contradictory pleading that appointment of the sole arbitrator was irregular as the same was unilaterally made by the applicants without consent of the other party to the agreement. The applicants have deliberately suppressed the stand taken by the non-applicants before the District Judge in the proceedings under Section 34 of the Act of 1996. Neither the application under Section 34 of the Act of 1996 nor the reply filed by the nonapplicants to the said application before the District Judge, has been filed along with the instant petition. The applicants have also not pleaded the nature of dispute that has arisen in relation to the deed, which is to be referred to the arbitrator in accordance with Clause 14 of the deed. In these circumstances, the award passed by the sole arbitrator, which has been subsequently set aside by the District Judge, has attained finality and the present dispute, which is sought to be raised by way of reference, would not be competent as the same is barred by the principles of constructive res judicata, which applies to the arbitration proceedings also.