SUPREME STRUCTURE PVT LTD Vs. HARBANS SINGH

JUDGEMENT

(1.) THIS petition under Section 34 of the Arbitration and Conciliation Act, 1996 (for short "the Act") has been preferred by the petitioner against an award dated 12th April 2003 whereby the Arbitral Tribunal upheld the claim of the respondent of Rs. 7,85,858/- with interest @ 24% from 9th November 2001 to 15th October 2002 amounting to Rs. 76,204/- and further interest @ 24% from 16th october 2002 till realization. Another claim of Rs. 3,40,000/- for loss of profit was also upheld. Thus total claim of Rs. 13,27,62. 78 plus interest on rs. 7,85,852/- @ 24% from 16. 10. 2002 was allowed and the award was passed against the petitioner.

(2.) BRIEF facts relevant for the purpose of deciding this petition are that the petitioner purchased Swarn Cinema from its erstwhile owner Mr. Sarabjit singh through valid documents. Mr. Sarabjit Singh, owner of firm M/s Swarn cinema, was having an agreement/contract with M/s Harbans Singh and Company under which M/s Harbans Singh and Company used to supply movies for running on swarn Cinema on sharing basis. M/s Harbans Singh and Company and Mr. Sarabjit singh, owner of Swarn Cinema, both were members of Motion Pictures Association and as per the rules of Motion Pictures Association, all disputes between its members were to be referred to the Arbitral Tribunal, one Arbitrator to be appointed by each party and the two Arbitrators jointly to appoint the Third arbitrator. M/s Harbans Singh and Company raised a dispute that its agreement with M/s Swarn Cinema was breached by the petitioner/purchaser as the petitioner had not allowed movies of respondent to run on the cinema. Petitioner had also not paid the old dues when the Cinema was owned by Mr. Sarabjit Singh. Respondent No. 1 referred the matter to Motion Pictures Association for arbitration and made M/s Swarn Cinema and the present petitioner as parties.

(3.) IT is to be noted that M/s Swarn Cinema was a proprietorship firm of mr. Sarabjit Singh and he was running the cinema in the name of this proprietorship firm. The agreement for supplying movies was between M/s Swarn cinema and M/s Harbans Singh and Company. After the matter was taken to the motion Picture Association, a notice was served upon petitioner and Mr. Sarabjit singh both for appointing an Arbitrator. It was informed that M/s Harbans Singh and Company had appointed its own arbitrator and the respondent i. e. M/s Swarn cinema and petitioner should appoint their side of arbitrator. Mr. Sarabjit Singh appeared before the Arbitrator and told that he had sold the cinema to petitioner and he abstained himself from the proceedings. The petitioner raised objection that there was no arbitration agreement between the petitioner and M/s harbans Singh and Company. There was no privity of contract between petitioner and M/s Harbans Singh and Company at any point of time. The Arbitrator had no jurisdiction to entertain the dispute. When the firm M/s Swarn Cinema and the present petitioner did not propose the name of any of the arbitrators, the motion Pictures Association of its own nominated Mr. Surinder Paul as arbitrator to act on behalf of petitioner herein. Before the Arbitral Tribunal was appointed, M/s Harbans Singh and Company had also filed an application under section 9 of the Act before this Court. However, during pendency of the proceedings under Section 9 of the Act, the applicant M/s Harbans Singh and company was asked to file original written arbitration agreement between claimant and the respondent, but instead of filing the arbitral agreement, the application itself was withdrawn.