{"id":52322,"date":"2011-01-06T00:00:00","date_gmt":"2011-01-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ramesh-chander-arora-vs-kashmir-saree-kendra-anr-on-6-january-2011"},"modified":"2018-08-02T15:51:21","modified_gmt":"2018-08-02T10:21:21","slug":"ramesh-chander-arora-vs-kashmir-saree-kendra-anr-on-6-january-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ramesh-chander-arora-vs-kashmir-saree-kendra-anr-on-6-january-2011","title":{"rendered":"Ramesh Chander Arora vs Kashmir Saree Kendra & Anr on 6 January, 2011"},"content":{"rendered":"
Delhi High Court<\/div>\n
Ramesh Chander Arora vs Kashmir Saree Kendra & Anr on 6 January, 2011<\/div>\n
Author: Mool Chand Garg<\/div>\n
*     IN THE HIGH COURT OF DELHI AT NEW DELHI\n\n+                  FAO.No.416\/2005 & C.M. 17787\/2005\n\n%                                                Reserved On: 20.12.2010\n                                                  Decided On: 06.01.2011\n\nRAMESH CHANDER ARORA                          .... Appellant\n               Through: Mr. G.L. Rawal, Sr. Adv. with Mr.\n                        Kuljeet Rawal, Adv.\n\n                                  Versus\n\nKASHMIR SAREE KENDRA                             .... Respondent\n                Through: Mr. Sunil Lalwani, Adv.\n\nCORAM:\nHON'BLE MR. JUSTICE MOOL CHAND GARG\n\n1.     Whether reporters of Local papers may be                  Yes\n       allowed to see the judgment?\n2.     To be referred to the reporter or not?                    Yes\n3.     Whether the judgment should be reported in                Yes\n       the Digest?\n\n:      MOOL CHAND GARG, J.\n<\/pre>\n
1.     The present appeal has been filed to assail the order dated
\n5.10.2005 passed by the learned ADJ, whereby objections filed by the
\nappellant against the arbitral award dated 9.11.2004 were dismissed.\n<\/p>\n
2.     The brief factual matrix of the case is as follows. That the
\nappellant is a readymade garments exporter whereas the respondent is
\na fabric supplier. The appellant entered into a commercial transaction
\nwith the respondent for the supply of 25,000 meters of silk at the rate of
\nRs. 85\/- per meter. The respondent supplied the goods through three
\nbills to the appellant. Disputes arose between the parties primarily over
\nthe issue of supply of defective goods by the respondent and non-
\npayment of bills of the goods. I will not go into the details of the dispute
\nfor the sake of brevity but focus on the main issue.\n<\/p>\n
3.     It is the stand of the appellant that neither there was any
\narbitration agreement between the parties nor the claim of the
\nrespondent was within limitation, despite that the Arbitrator has
\nallowed the claim of the appellant and in this manner has mis-
\nconducted the proceedings and therefore, the said proceedings are
\nFAO No. 416\/2005                                             Page 1 of 13<\/span>
\n liable to be set aside. However, the learned ADJ has simply brushed
\naside the legal issue i.e. there being no arbitration agreement between
\nthe parties and the claim filed by the respondent being beyond
\nlimitation despite specific objection taken about it by the appellants in
\nhaving filed an application under Section 16 of the Arbitration and
\nConciliation Act, 1994.\n<\/p>\n
4.     To appreciate the aforesaid contention of the appellant, I may
\nobserve that out of the three bills on which reliance has been placed
\nupon by the respondent to contend that there was an arbitration
\nclause, as far as the bill dated 15.1.2000 is considered, it does not
\ncontain any clause that the disputes will be decided by way of
\narbitration. As far as the other two bills are concerned, even though
\nthese have a clause printed on the back of it, it does not reflect any
\nagreement between the parties that the disputes will be decided
\nsubject     to     a   decision   of   the   Delhi   Hindustani   Mercantile
\nAssociation by way of an arbitration. The said clause reads as
\nunder:-\n<\/p>\n
       “clause 3: All the disputes will be decided by Delhi
\n       Mercantile Association as well as Courts within Delhi.”\n<\/p>\n
5.     The claim has been lodged by the respondent on 7.02.2003.
\nThus, the claim was barred by limitation yet the Arbitrator before whom
\nalso a specific objection regarding limitation was taken up by moving an
\napplication under Section 16 of the Arbitration and Conciliation Act on
\nthe point of limitation, has given no decision on the aforesaid
\napplication even though the Ld. Arbitrator heard the application and
\ndeferred it to be decided along with the judgment of the claim petition
\nand he gave the arbitral award dated 9.11.2004 in the favour of the
\nrespondent whereby an amount of `4,91,046.43 as principal amount
\nand `4,42,500 as interest at the rate of 18 percent till 18.08.2003 and
\n`10,000\/- as costs of Suit totaling to `9,43,546.43 has been awarded.\n<\/p>\n
6.     After the award was passed the appellant filed objections against
\nthe award dated 9.11.2004 objecting to the jurisdiction of the Arbitrator
\nand also on account of limitation. The Ld. ADJ framed the following
\nissues:-\n<\/p>\n
FAO No. 416\/2005                                              Page 2 of 13<\/span><\/p>\n
        1.      Whether there exists any arbitration agreement
\n               between the claimant and the respondent?<\/p>\n
       2.      Whether the claimant is a registered Partnership firm?\n<\/p><\/blockquote>\n
               If not, what is its effect on the present case?\n<\/p><\/blockquote>\n
       3.      Whether the claim of the claimant is within limitation?\n<\/p><\/blockquote>\n
       4.      Whether the claimant is entitled to recover the claim
\n               amount including the interest and cost from the
\n               respondent. if yes, interest at what rate?\n<\/p><\/blockquote>\n
7.     Objections have been disposed of by making following
\nobservations:-\n<\/p>\n
       “8. The other objection with regard to the jurisdiction and
\n       limitation have also been dealt by the arbitrator. The
\n       arbitrator was of the view that there is a printed clause on
\n       the bill no.1 and 2 which says that the dispute shall be
\n       subject matter of the arbitration of the Delhi Hindustani
\n       Mercantile Association. So far the bill no.3 is concerned, that
\n       was the part of the continuous transaction between the
\n       respondent no.1 and the petitioner and the same could also
\n       be dealt under the arbitration along with the other bills
\n       being a part of the continuous transactions between the
\n       parties. The objection raised by the objector that the claim
\n       against the bill no.1 is barred by limitation is also without
\n       any basis. The Ld. Arbitrator has also categorically dealt with
\n       this aspect. Admittedly, the respondent no.1 has made the
\n       payment of Rs. 25,000\/- as the part of payment of the
\n       transactions which brings the claim of the respondent no.1
\n       within the period of limitation. In brief, the objection raised
\n       by the petitioner against the award of the arbitrator are
\n       without any basis and not supported by any factual or legal
\n       standard.\n<\/p><\/blockquote>\n
       9.   Consequently, I do not find any substance in the
\n       objections and I am of the considered opinion that there is
\n       no ground made out for set-asiding the award dated
\n       9.11.2004. The issue is accordingly decided against the
\n       object\/petitioner.”\n<\/p><\/blockquote>\n
8.     To appreciate the averments made by the appellant whereby they
\nhave objected to not only the arbitration of Delhi Hindustani Mercantile
\nAssociation: the respondent firm being not a registered partnership firm
\nand the claim petition being hopelessly time barred.       The averments
\nmade in paragraph 8 of the appeal are reproduced hereunder for the
\nsake of reference:-\n<\/p>\n
       “8.   Appellant submits that after the said arbitration
\n       proceedings were thrust own upon the appellant who
\n       contested the said proceedings by filing written statement
\nFAO No. 416\/2005                                             Page 3 of 13<\/span>
\n        thereof. In nutshell appellant agitated before the so-called
\n       Arbitrator to the following:-\n<\/p><\/blockquote>\n
       i)    That the claimant firm is not a registered partnership
\n       firm and Shri Ghulam Qadir is not one of the registered
\n       partner of the alleged firm, hence claim is not maintainable.\n<\/p><\/blockquote>\n
       ii)     Claim petition is hopelessly time barred.\n<\/p><\/blockquote>\n
       iii)  Claim petition is not maintainable in view of the fact
\n       that the Tribunal did not have jurisdiction to entertain
\n       and\/or to try the subject dispute between parties. There
\n       was no valid or existing claim clause between the parties as,
\n       never any such Agreement was executed between the parties
\n       containing arbitration clause.\n<\/p><\/blockquote>\n
       iv)   Without prejudice and alternate it was submitted that
\n       there is no appointment of Arbitrator as per law and
\n       reference thereof as not as per the requirements thereof.”\n<\/p><\/blockquote>\n
9.     To appreciate the averments made on behalf of the appellant, I
\nhave already referred to the relevant arbitration clause relied upon by
\nthe respondents printed on the back of the two bills i.e. clause 3 in
\nparagraph 4 above. A bare reading of the relevant clause reflects that
\nthe printed term does not require the disputes to be referred to for
\narbitration to Delhi Hindustani Mercantile Association but only refers
\nto Delhi Mercantile Association.\n<\/p>\n
10.    Now coming to the second plea of the appellant that they had
\nraised specific objections with regard to the arbitrability of the disputes
\nby the aforesaid Association by writing a letter copy of which has been
\nannexed along with the appeal as Annexure 2 available at page 32
\nreads as under:\n<\/p>\n
       “To,
\n       Delhi Hindustani Merkentile
\n       Association,
\n       1210\/16, Chandni Chowk,
\n       Delhi-110006.\n<\/p><\/blockquote>\n
       Sub:- Your Letter dated 13.02.2003
\n       Ref: No.306\/2002-03.\n<\/p><\/blockquote>\n
       D\/Sir<\/p>\n
             In this connection we are sorry to state that we can’t
\n       take cognizance of above mentioned letter as we are not
\n       subject to jurisdiction any association by the name of “Delhi
\nFAO No. 416\/2005                                            Page 4 of 13<\/span>
\n        Hindustani Markentile        Association”      1210\/16,   Chandni
\n       Chowk, Delhi-6.\n<\/p><\/blockquote>\n
              Kindly note that our terms of contract entered between
\n       Kashmir Saree Kendra & us was very clear on the point that
\n       no arbitrator without the mutual consent of both the parties
\n       will be appointed and no reference can be made for
\n       arbitration unilaterally. Kindly let us know our consent
\n       letter or signed agreement on this account.\n<\/p><\/blockquote>\n
             In any case we append below various reminders sent
\n       to Kashmir Sarees Kendra for your information and records.\n<\/p><\/blockquote>\n
       Thanking you,
\n       Yours Faithfully
\n       For Rachna Exports.”\n<\/p><\/blockquote>\n
11.        The original of the aforesaid letter is available on record of the
\nArbitrator and a reference thereof also finds mention in the ordersheet
\nof the Arbitrator dated 27.05.2003 except that there is no disposal of
\nthe aforesaid objection by the Arbitrator in the award.\n<\/p>\n
12.    As far as the issue of the respondent-firm being not a registered
\npartnership firm, there is nothing on record which may take away this
\nobjection. Even the Arbitrator has also not repelled this objection. The
\narbitrator has only tried to say that for a dispute being referred to
\nMercantile Association, it is not necessary that the partnership firm
\nshoud be registered under the Partnership Act.\n<\/p>\n
13.    To explain as to how the claim of the respondent was time
\nbarred, the appellant has referred to claim petition filed before the
\nArbtirator. It is shown that in the said claim, the claimant themselves
\nhave referred to three separate claim, i.e., claim No.1, Claim No.2 and
\nClaim No.3. The details of those claims, as mentioned at page 4 of the
\nclaim is as follows:-\n<\/p>\n
       1.      Claim No.1                 `4,54,070.00\n       2.      Claim No.2                 ` 13,882.68\n       3.      Claim No.3                 ` 23,093.75\n                                  ----------------------------\n                                          `4,91,046.43\n                                  ______________________\n\n<\/pre>\n
14.    Now coming to claim No.3, further details by the respondent is as
\nfollows:\n<\/p>\n
FAO No. 416\/2005                                                 Page 5 of 13<\/span><\/p>\n
        “The respondent further supplied 506.25 meter of silk @
\n       `95\/- per meter vide Bill No.1137 dated 15.01.2000 and the
\n       sale price comes to `48,093.15 and out of this amount the
\n       respondent paid only `25,000\/- to the claimant and thus, an
\n       amount of `23,095.75 is outstanding against the
\n       respondent.\n<\/p><\/blockquote>\n
15.    This goes to show that the third bill dated 15.01.2000 was for a
\nsum of `48,093.15 and out of the aforesaid amount the respondent
\nadjusted a sum of `25,000\/- towards the aforesaid bill which was paid
\nby the appellant on 07.02.2007 and debited the balance of rs.23,095.75
\nas the amount payable with respect to Claim No.3 as stated above.\n<\/p>\n
16.    According to the appellant this goes to show that the three claims
\nwere being dealt separately by the respondents themselves. The first
\nclaim which was regarding supply of 25000 meters of silk, supplies
\nwere made till 21.07.1997 and in this regard, the bill which was left
\npayable by the appellant as on 07.08.1997 was to the tune of
\n`4,54,070\/-.       Whereas with respect to the second claim, out of the
\norder of 2200 meters of silk, the order was complied with by the
\nrespondent as per Bill No.5721 and 5728 and out of the aforesaid
\namount only a sum of `12,882.68 was due and payable by the
\nappellant to the respondent.      Obviously, these two bills are prior to
\nraising of the third claim which pertains to Bill No.1137 dated
\n15.01.2000. Thus, it is the case of the appellant that all the claims of
\nthe respondent were prior to 15.01.2000 and, therefore, raising a
\ndispute on 16.02.2003 makes the entire claim barred by limitation. It
\nis submitted that the effort made on the part of the respondent to bring
\nthe entire claim within limitation on the basis of a receipt of a sum of
\n`25,000\/- which they themselves have adjusted towards the payment
\nof the third bill and not towards the payment of the entire outstanding
\namount is not sustainable in law so as to bring the entire claim within
\nlimitation.\n<\/p>\n
17.    It is thus, pleaded that before the Arbitrator also it was the case
\nof the appellant that not only the arbitrator had no jurisdiction to try
\nthe dispute between the parties, the claim of the respondent was also
\nbarred by limitation.\n<\/p>\n
FAO No. 416\/2005                                            Page 6 of 13<\/span><\/p>\n
 18.    My attention has also been drawn by the learned counsel for the
\nappellant to the written statement filed by them before the Arbitrator.
\nIn this written statement also specific objections have been taken with
\nrespect to all the three aspects inasmuch as in preliminary objections
\nNo.1, the plea of the respondent-firm being not registered as a
\npartnership firm has been taken; in preliminary objection No.2, issue of
\nlimitation has been specifically taken while in preliminary objections
\nNo.3, the issue with regard to the jurisdiction of the Arbitration
\nTribunal\/Mercantile Association has been taken.        Despite all these
\nspecific objections, perusal of the record goes to show that the
\nArbitrator has brushed aside all the aforesaid three objections.\n<\/p>\n
19.    I have gone through the award given by the Arbitrator. In the
\naward various issues raised by the appellant stands mentioned as
\nissues. However, while dealing with the first objection regarding the
\nArbitral Forum as mentioned on the back of the two bills being Delhi
\nMercantile Association: it has simply been mentioned that in the bills of
\nclaim there is a mention of Delhi Hindustani Mercantile Association
\n(Regd.), which is contrary to record. None of such bill which contain
\nthe terms and conditions that the disputes will be referred to Delhi
\nHindustani Mercantile Association is available on the arbitration record
\nrather the bills of which mention has been made by the appellant
\nbefore this Court, there is a mention of only Delhi Mercantile
\nAssociation and not Delhi Hindustani Mercantile Association. As far as
\nthe arbitration record is concerned, only photocopies of the bills are
\navailable which do not have the back of the bills.\n<\/p>\n
20.    As regards the second objection regarding registration of the
\npartnership firm being not there, the Arbitrator has simply stated that
\nthe said registration is not required as per the rules of Delhi Hindustani
\nMercantile Association. Such rules which are contrary to law cannot be
\ntaken cognizance of. In this regard we may refer to Section 69 of the
\nIndian Partnership Act, 1932 which reads as under:\n<\/p>\n
       “69.        EFFECT          OF        NON-REGISTRATION.-\n<\/p>\n
       (1)   No suit to enforce a right arising from a contract or
\n       conferred by this Act shall be instituted in any Court by or
\n       on a behalf of any persons suing as a partner in a firm
\n       against the firm or any person alleged to be or to have been a
\nFAO No. 416\/2005                                            Page 7 of 13<\/span>
\n        partner in the firm unless the firm is registered and the
\n       person suing is or has been shown in the Register of Firms
\n       as a partner in the firm:\n<\/p>\n
       Provided that the requirement of registration of firm under
\n       this sub-section shall not apply to the suits or proceedings
\n       instituted by the heirs or legal representatives of the
\n       deceased partner of a firm for accounts of the firm or to
\n       realise the property of the firm.\n<\/p>\n
       (2) No suit to enforce a right arising from a contract shall be
\n       instituted in any court by or on behalf of a firm against any
\n       third party unless the firm is registered and the persons
\n       suing are or have been shown in the Register of Firms as
\n       partners in the firm.\n<\/p>\n
       (2A) No suit to enforce any right for the dissolution of a firm
\n       or for accounts of a dissolved firm or any right or power to
\n       realise the property of a dissolved firm shall be instituted in
\n       any Court by or on behalf of any person suing as a partner
\n       in a firm against the firm or any person alleged to be or have
\n       been a partner in the firm, unless the firm is registered and
\n       the person suing is or has been shown in the Register of
\n       Firms as a partner in the firm:\n<\/p>\n
       Provided that the requirement of registration of firm under
\n       this sub-section shall not apply to the suits or proceedings
\n       instituted by the heirs or legal representatives of the
\n       deceased partner of a firm for accounts of a dissolved firm or
\n       to realise the property of a dissolved firm.\n<\/p>\n
       (3) The provisions of sub-sections (1), (2) and (2A) shall apply
\n       also to a claim of set-off or other proceedings to enforce a
\n       right arising from a contract but shall not affect<\/p>\n
       (a) the firms constituted for a duration upto six months or
\n       with a capital upto two thousand rupees;\n<\/p>\n
       or;\n<\/p>\n
       (b) the powers of an official assigned, receiver or Court under
\n       the Presidency Towns Insolvency Act, 1909, or the Provincial
\n       Insolvency Act, 1920, to realise the property of an insolvent
\n       partner.\n<\/p>\n
       (4) This section shall not apply<\/p>\n
       (a) to firms or partners in firm which have no place of
\n       business in the territories to which this Act extends, or
\nFAO No. 416\/2005                                             Page 8 of 13<\/span>
\n        whose places of business in the said territories are situated
\n       in areas to which, by notification under section 56 this
\n       Chapter does not apply, or<\/p>\n
       (b) to any suit or claim of set-off not exceeding one hundred
\n       rupees in value which, in the presidency towns, is not of a
\n       kind specified in section 19 of the Presidency Small Cause
\n       Courts Act, 1882, or outside the Presidency towns, is not of
\n       a kind specified in the Second Schedule to the Provincial
\n       Small Cause Courts Act, 1887, or to any proceeding in
\n       execution or other proceeding incidental to or arising from
\n       any such suit or claim.”\n<\/p>\n
21.    Now coming to the objection of the appellant with regard to plea
\nof limitation, I find that the Arbitrator has ignored the claim of the
\nrespondent itself who have adjusted a sum of `25,000\/- only in the
\nthird bill and not in account because no running account has been
\nplaced on record which may go to show that the adjustment was in a
\nrunning account.        Moreover, the third bill was subject to Srinagar
\njurisdiction.\n<\/p>\n
22.    All these objections which were raised by the appellant before the
\nArbitrator as also before the learned ADJ were legal objections and go
\nto show that the award given by the Arbitrator was contrary to law and
\nthus, comes in the ambit of being violative of public policy which is a
\nground to raise such objections under Section 34(2)(b) of the
\nArbitration and Conciliation Act, 1996 which reads as under:\n<\/p>\n
       “34. Application for setting aside arbitral award.-\n<\/p><\/blockquote>\n
       1.   xxxxx<\/p>\n<\/blockquote>\n
       2.       An arbitral award may be set aside by the Court only
\n                if–\n<\/p><\/blockquote>\n
       (a)      xxxxx\n\n       (b)      the Court finds that--\n       (i)      the subject-matter of the dispute is not capable of\n<\/pre>\n
                settlement by arbitration under the law for the time
\n                being in force, or<\/p>\n<\/blockquote>\n
       (ii)     the arbitral award is in conflict with the public policy
\n                of India.”\n<\/p><\/blockquote>\n
23.    As far as public policy and its interpretation is concerned, the law
\nis now well settled. The Supreme Court in the case of in the case of
\nFAO No. 416\/2005                                              Page 9 of 13<\/span>
\n ONGC VS. SAWPIPES, 2003 (5) SCC 705. has been pleased to interpret
\nas follows:-\n<\/p>\n
       “WHAT MEANING COULD BE ASSIGNED TO THE
\n       PHRASE ‘PUBLIC POLICY OF INDIA’?\n<\/p><\/blockquote>\n
       16. The next clause which requires interpretation is
\n       Clause (ii) of Sub-section 2(b) of Section 34 which inter
\n       alia provides that the Court may set aside arbitral award
\n       if it is in conflict with the ‘Public Policy of India’. The
\n       phrase ‘Public Policy of India’ is not defined under the
\n       Act. Hence, the said term is required to be given meaning
\n       in context and also considering the purpose of the section
\n       and scheme of the Act. It has been repeatedly stated by
\n       various authorities that the expression ‘public policy’ does
\n       not admit of precise definition and may vary from
\n       generation to generation and from time to time. Hence,
\n       the concept ‘public policy’ is considered to be vague,
\n       susceptible to narrow or wider meaning depending upon
\n       the context in which it is used. Lacking precedent the
\n       Court has to give its meaning in the light and principles
\n       underlying the Arbitration Act, Contract Act and
\n       Constitutional provisions.\n<\/p><\/blockquote>\n
       17. For this purpose, we would refer to few decisions
\n       referred to by the learned counsel for the parties. While
\n       dealing with the concept of public policy, this Court in
\n       Central Inland Water Transport Corporation Limited
\n       and Anr. v. Brojo Nath Ganguly and Anr.<\/a>\n<\/p><\/blockquote>\n
       (1986)IILLJ171SC has observed thus:–\n<\/p><\/blockquote>\n
       “92. The Indian Contract Act does not define the
\n       expression “public policy” or “opposed to public policy”.
\n       From the very nature of things, the expressions “public
\n       policy”, “opposed to public policy”, or “contrary to public
\n       policy” are incapable of precise definition. Public policy,
\n       however, is not the policy of a particular government. It
\n       connotes some matter which concerns the public good
\n       and the public interest. The concept of what is for the
\n       public good or in the public interest or what would be
\n       injurious or harmful to the public good or the public
\n       interest has varied from time to time. As new concepts
\n       take the place of old, transactions which were once
\n       considered against public policy are now being upheld by
\n       the courts and similarly where there has been a well
\n       recognised head of public policy, the courts have not
\n       shirked from extending it to the new transactions and
\n       changed circumstances and have at times not even
\n       flinched from inventing a new head of public policy.
\n       There are two schools of though — “the narrow view”
\n       school and “the broad view” school. According to the
\nFAO No. 416\/2005                                            Page 10 of 13<\/span>
\n        former, courts cannot create new heads of public policy
\n       whereas the latter countenances judicial law-making in
\n       this area. The adherents of the “the narrow view” school
\n       would not invalidate a contract on the ground of public
\n       policy unless that particular ground had been well-
\n       established by authorities. Hardly ever has the voice of
\n       the timorous spoken more clearly and loudly than in
\n       these words of Lord Davey in Janson v. Driefontein
\n       Consolidated Gold Mines Ltd.(1902) AC 484: “Public
\n       Policy is always an unsafe and treacherous ground
\n       for legal decision”. That was in the year 1902. Seventy-
\n       eight years earlier, Burrough, J., in Richardson v. Mellish
\n       (1824) 2 Bing 229 described public policy as “a very
\n       unruly horse, and when once you get astride it you never
\n       know where it will carry you.” The Master of the Rolls
\n       Lord Denning, however, was not a man to shy away from
\n       unmanageable horse and in words which conjure up
\n       before our eyes the picture of the young Alexander the
\n       Great laming Bucephalus, he said in Enderby Town
\n       Football Club Ltd. v. Football Assn. Ltd. (1971) Ch. 591;
\n       “with a good man in the saddle, the unruly horse can be
\n       kept in control. It can jump over obstacles”. Had the
\n       timorous always held the field, not only the doctrine of
\n       public policy but even the Common Law or the principles
\n       of Equity would never have evolved. Sir William
\n       Holdsworth in his “History of English Law”, Volume III,
\n       page 55, has said:\n<\/p><\/blockquote>\n
               In fact, a body of law like the common law, which
\n               has grown up gradually with the growth of the
\n               nation. necessarily acquires some fixed principles,
\n               and if it is to maintain these principles it must be
\n               able, on the ground of public policy or some other
\n               like ground, to suppress practices which, under
\n               ever new disguises seek to weaken or negative
\n               them.\n<\/p><\/blockquote>\n
       It is thus clear that the principles governing public policy
\n       must be and are capable, on proper occasion, of
\n       expansion or modification. Practices which were
\n       considered perfectly normal at one time have today
\n       become obnoxious and oppressive to public conscience. If
\n       there is no head of public policy which covers a case, then
\n       the court must in consonance with public conscience.
\n       and in keeping with public good and public interest
\n       declare such practice to be opposed to public policy.
\n       Above all, in deciding any case which may not be covered
\n       by authority our courts have before them the beacon light
\n       of the Preamble to the Constitution. Lacking precedent,
\n       the court can always be guided by that light and the
\n       principles underlying the Fundamental Rights and the
\n       Directive Principles enshrined in our Constitution.\n<\/p><\/blockquote>\n
FAO No. 416\/2005                                             Page 11 of 13<\/span><\/p>\n
        93. The normal rule of Common Law has been that a
\n       party who seeks to enforce an agreement which is
\n       opposed to public policy will be non-suited. The case of A.
\n       Schroeder Music Public Co. Ltd. v. Macaulay (1974) 1 WLR
\n       1308, however, establishes that where a contract is
\n       vitiated as being contrary to public policy, the party
\n       adversely affected by it can sue to have it declared void.
\n       The case may be different where the purpose of the
\n       contract is illegal or immoral. In Kedar Nath Motani v.
\n       Prahlad Rai<\/a> [1960]1SCR861 , reversing the High Court
\n       and restoring the decree passed by the trial court
\n       declaring the appellants’ tile to the lands in suit and
\n       directing the respondents who were the appellants’
\n       benamidars to restore possession, this Court, after
\n       discussing the English and Indian law on the subject,
\n       said (at page 873):\n<\/p><\/blockquote>\n
               The correct position in law, in our opinion, is that
\n               what one has to see is whether the illegality goes so
\n               much to the root of the matter the plaintiff cannot
\n               bring his action without relying upon the illegal
\n               transaction into which he had entered. If the
\n               illegality be trivial or venial, as stated by Williston
\n               and the plaintiff is not required to rest his case
\n               upon that illegality, then public policy demands
\n               that the defendant should not be allowed to take
\n               advantage of the position. A strict view, of course,
\n               must be taken of the plaintiff’s conduct, and he
\n               should not be allowed to circumvent the illegality by
\n               resorting to some subterfuge or by misstating the
\n               facts. If, however, the matter is clear and the
\n               illegality is not required to be pleaded or proved as
\n               part of the cause of action and the plaintiff recanted
\n               before the illegal purpose was achieved. then,
\n               unless it be of such a gross nature as to outrage
\n               the conscience of the court, the plea of the
\n               defendant should not prevail.\n<\/p><\/blockquote>\n<\/blockquote>\n
       94. The type of contract to which the principle
\n       formulated by us above applies are not contracts which
\n       are tainted with illegality but are contracts which contain
\n       terms which are so unfair and unreasonable that they
\n       shock the conscience of the court. They are opposed to
\n       public policy and require to be adjudged void.”\n<\/p><\/blockquote>\n
24.    The violation of the statutory provision which in this case
\ninvolves violation of Section 16 of the Arbitration and Conciliation Act,
\n1996; violation of Section 69 of the Partnership Act as well as violation
\nof Limitation Act, establishes that the award given by the Arbitrator
\nwas contrary to law and thus, against public policy. However, learned<\/p>\n
FAO No. 416\/2005                                               Page 12 of 13<\/span>
\n ADJ has not taken note of any of these objections while deciding the
\nobjections vide impugned order against which the appellant has come
\nin appeal before this Court.\n<\/p>\n
25.    A bare perusal of the aforesaid shows that neither the issue of
\nthere being no arbitration clause as specifically alleged by the appellant
\nhas been discussed by the ADJ in the impugned order, nor it has been
\ndiscussed by the arbitrator. Similarly, the issue of limitation has also
\nnot been discussed.     In these circumstances, the order of the ADJ
\ncannot be sustained. Consequently, the award given by the Arbitrator
\nis also set aside. Appeal is allowed with no order as to costs.
\nC.M. 17787\/2005(stay)<\/p>\n
       Interim orders are made absolute.\n<\/p>\n
       The application is disposed of.\n<\/p>\n
                                                  MOOL CHAND GARG,J
\nJANUARY 06, 2011
\n‘anb’<\/p>\n
FAO No. 416\/2005                                            Page 13 of 13<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court Ramesh Chander Arora vs Kashmir Saree Kendra & Anr on 6 January, 2011 Author: Mool Chand Garg * IN THE HIGH COURT OF DELHI AT NEW DELHI + FAO.No.416\/2005 & C.M. 17787\/2005 % Reserved On: 20.12.2010 Decided On: 06.01.2011 RAMESH CHANDER ARORA …. Appellant Through: Mr. G.L. Rawal, Sr. Adv. with Mr. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-52322","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nRamesh Chander Arora vs Kashmir Saree Kendra & Anr on 6 January, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ramesh-chander-arora-vs-kashmir-saree-kendra-anr-on-6-january-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ramesh Chander Arora vs Kashmir Saree Kendra & Anr on 6 January, 2011 - 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