GANESH BUILDERS Vs. NAGORAO

JUDGEMENT

(1.) Admit. Taken up for hearing with the consent of counsel for the parties.

(2.) This appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 ( for short, 'the said Act') takes exception to the judgment of the learned Principal District Judge, Nagpur in Miscellaneous Civil Application No. 25 of 2006 dated 10.11.2016. By that judgment the application filed under Section 34 of the said Act by the respondent nos. 1 to 5 herein has been allowed and the award dated 13.10.2005 passed by the sole Arbitrator has been set aside.

(3.) The facts giving rise to the present proceedings are that it is the case of the appellant-claimants that one Motiram was the owner of land admeasuring about 19.20 acres in Khasra Nos. 27/4 and 240/4. After his death his widow-Manjulabai, two sons Nagorao and Baban and three daughters - Chhayabai, Suman and Chandrakala succeeded to that property. The said legal heirs on 01.04.1999 executed an agreement with the claimant so as to sell the aforesaid land @ Rs.12,50,000/- per acre. After the payment of initial earnest amount of Rs.2,50,000/-, it is the case of the claimant that it has paid an amount of Rs.35,00,000/- in all to Nagorao and Baban. Since requisite steps were not being taken by the signatories to the said agreement, a legal notice dated 13.09.2011 came to be issued on behalf of the claimant calling upon the signatories to take necessary steps to complete the transaction. It is the further case that on 17.08.1999 another agreement containing an arbitration clause (Lavad Kararnama) came to be executed appointing Shri C.V.Kale, Advocate as an Arbitrator. The claimant came across a public notice dated 14.05.2002 in various newspapers which indicated that the respondents were intending to deal with the property in question. On 27.11.2003 the claimant issued a letter to the respondents as well as to the sole Arbitrator seeking initiation of the arbitral proceedings. In response to the claim statement as filed, Nagorao and Baban filed written statement admitting the execution of agreement dated 01.04.1999. However it was denied that the subsequent agreement dated 17.08.1999 containing the arbitration clause was executed by them. Receipt of amount of Rs.20,00,000/- by both the brothers was admitted. Receipt of cash payment of Rs.15,00,000/- as pleaded by the claimant was disputed. Before the sole Arbitrator the parties led their evidence. After considering the same, the Arbitrator came to the conclusion that the respondents had failed to complete the transaction as agreed on 01.04.1999. They were accordingly directed to receive the balance consideration which the claimant was directed to pay and thereafter execute the sale deed in favour of the claimant. The said award was passed on 13.10.2005. Nagorao and Baban challenged the aforesaid award by filing Miscellaneous Civil Application No.25/2006. During the pendency of the said proceedings, Baban expired. His legal heirs were brought on record. By the impugned judgment, the learned Principal District Judge came to the conclusion that there existed circumstances that gave rise to justifiable doubts as to the independence and impartiality of the Arbitrator. Since these circumstances which were required to be disclosed to the parties by the Arbitrator were not so disclosed and as there was perversity found in the adjudication by the Arbitrator, the award came to be set aside under Section 12 read with Section 13(5) of the said Act. Being aggrieved the claimant has filed the present appeal.