Modern Suitings Ltd. vs Jugal Kishore And Sons And Ors. on 1 July, 1995

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Delhi High Court
Modern Suitings Ltd. vs Jugal Kishore And Sons And Ors. on 1 July, 1995
Equivalent citations: 59 (1995) DLT 277
Author: D Gupta
Bench: D Gupta

JUDGMENT

Devinder Gupta, J.

(1) On 26th February, 1992, an award was made by the Arbitrators, who were appointed as such by the Delhi Hindustani Mercantile Association (Registered), to whom the disputes, which had arisen amongst the claimants and respondents I and 2 were referred. The claimant moved an application seeking directions against the Arbitrators as also the Delhi Hindustani Mercantile Association (Register) to file the award in Court and then to pass decree in terms thereof. After notice the award was filed in Court along with the proceedings recorded by the Arbitrators. Respondents 1 and 2 chosen to prefer objections to the award.

(2) Respondents have alleged that Rules 36 and 37 of the Delhi Hindustani Mercantile Association Rules and Regulations (hereinafter referred to as “the Rules”) have not been followed. As per Rule 36, only the Members of the Association are entitled to refer their disputes to the Association to be decided by the process of arbitration. A non-member is not entitled to refer disputes for adjudication. Since the claimant is a non-member, therefore, disputes could not have been referred to adjudication by the Arbitrators. Thus according to the respondents, the award is without jurisdiction. In addition, the other objections are that the claimant had not filed any claim before the Association but had moved only an application seeking permission to file a claim. Three Members of the Association thereafter put pressure on the respondents to sign the proceedings in which the President of the Association was authorised to give decision and it was on that application that award was made. Sufficient opportunity was not allowed to the respondents to put forth their claim and even the counter-claims of the respondents have not been adjudicated upon.

(3) The claimant has vehemently opposed the objections and has termed the same to be false and vexatious. According to the claimant, on 5th February, 1992, respondents categorically agreed for settlement of the disputes through the process of arbitration by the three Arbitrators, namely, Shri Tilak Raj Kapur, President of the Association; Shri Suresh Bindal, Senior Vice President; and Shri Mangal Sain Malhotra. The name of Shri Mangan Sain Malhotra was suggested by respondents 1 and 2 which was also agreed upon by the claimant. Respondents 1 and 2 duly participated in the entire arbitration proceedings and did not raise any objection as regards the jurisdiction of the Arbitrators. Having voluntarily submitted to the authority of the Arbitrators and having consented for adjudication of the disputes by Arbitrators, the respondents are estopped from raising any objection. According to the claimants, the claim as well as counter claim were duly considered and award was made which is not liable to be set aside on any plea/ground, as alleged.

(4) Learned Counsel for the parties have been heard, who have taken me through the entire arbitration proceedings.

(5) On 16th February, 1992, an application was made by the claimants to the Association informing that goods were dispatched to respondent No. I against their order. All bills remained unpaid, copy of which was attached to the letter. Inspite of repeated requests, the payments had not been received, that the goods, which were dispatched were lifted by respondent No. 1. Claimant also informed that it had also applied for the membership of the Association. Upon receipt of this request from the claimant, notice was issued by the Association to respondent No. 1 and respondent No.1 started appearing in proceedings before the Association through is partner Shri G.D.Gupta. Claims and counter claims were then discussed at various meetings which were held from time to time. On 29th January, 1992, accounts were also gone into amongst the parties. Proceedings are duly signed by Shri G.D. Gupta on behalf of the respondents. On the claims and counter claims, both the parties were directed to submit their accounts within 8 days in writing, failing which it was ordered that Association will go through the accounts of the respective parties by nominating its own agent and proceed to dispose of the matter. Proceedings were adjourned to 5th February, 1992. On 5th February, 1992, Shri Praveen Khanna on behalf of the claimant, Shri Ghanshyam Dass on behalf of respondent No. 1 and Shri S.P. Gupta on behalf of respondent No. 2 were present. Their statements were recorded in which they narrated their claims and counter claims and also agreed that the claims and counter claims be adjudicated upon by Arbitrators and agreed for the appointment of Shri Tilak Raj Kapur, President; Shri Suresh Bindal, Senior Vice President and Shri Mangan Sain Malhotra, Member as the Arbitrators, to adjudicate upon their claims and give their award. It was also agreed that the award to be given by these three Arbitrators will be acceptable and binding on the parties. Proceedings further show that after this statement was recorded, again statement of parties were recorded and they were heard on 18th February, 1992, on the merits of their claim, on which date the Arbitrators after hearing observed that they had fully heard the parties and reserved their award. The award was accordingly made and published on 26th February, 1992. It is a majority award in which Shri Mangal Sain Malhotra gave a descenting note.

(6) In view of the above, the contention of respondents 1 and 2 that Arbitrators had no jurisdiction cannot be accepted, more particularly after respondents I and 2 duly authorised the Arbitrators to enter upon reference and adjudicate upon their disputes, namely, claim and counter claim. Proceedings also record that claims and counter claims of the parties were duly considered on which an award was made. There was no question of making any reasoned award since there was no stipulation to that effect. It is not a speaking award. It is also not shown that there is any error apparent on the face of the record. This Court will not interfere with the findings of the Arbitrators in view of the fact that one of the Arbitrators have given a note for discent but without stating what was the reason for his not accepting the verdict. He has simply stated “I disagree”. As per the Rules of the Association, the majority is to prevail. The record further reveals that on 16th February, 1989, claimant had submitted an application for Membership of the Association and the membership is valid for a period of two years. The claimant was admitted as Member only on 17th October, 1992. It is not disputed that respondents 1 and 2 are and were the Members of the Association on the relevant dates. Even if claimant was not admitted as a member that alone will not render the award vitiated when on 5th February, 1992 the respondents agreed on the disputes raised that they will have no objection in case the same are adjudicated upon by the three Arbitrators, one of whom was named by them. Respondents 1 and 2 having submitted to the authority of the Arbitrators without objection are now precluded from challenging their jurisdiction. Respondents 1 and 2 have also failed to adduce any evidence on the point that any pressure was put on them for agreeing to have the disputes referred to the Arbitrators. In view of the above, the objections are liable to be dismissed and are dismissed as such. The award made by Arbitrators is made rule of the Court and decree in terms thereof is passed in favor of the claimant and against respondents 1 and 2. Decree be drawn accordingly. The award shall form part of the decree.

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