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Akhil Bhartiya Mahajan Shiromani Sabha v/s Dharamveer Mahajan

Company & Directors' Information:- AKHIL INDIA PRIVATE LIMITED [Active] CIN = U51109JK2000PTC002046

Company & Directors' Information:- AKHIL CORPORATION PRIVATE LIMITED [Under Process of Striking Off] CIN = U74900TG2015PTC098902

    OMP Appeal No. 2931 of 2008

    Decided On, 19 August 2008

    At, High Court of Delhi


    For the Appearing Parties: Harish Malhotra, Namita Chaudhary, P.P.N.Razdan, Prabhat Ranjan, R.P.Bansal, Rajender Agarwal, Rakesh Mahajan, Sheetesh Khanna, T.N.Razdan, Vipul Gupta, Advocates.

Judgment Text


(1) THESE petitions have been preferred under Section 34 of the arbitration and Conciliation Act, 1996 challenging the awarded dated 28th April, 2008 of Justice R. C. Chopra (retd.). Justice R. C. Chopra (retd.)was appointed as "arbitrator/court Commissioner" vide order dated 29th august, 2007 of the Division Bench of this court in R. F. A. No. 48/2007. For expediency, the order dated 29th August, 2007 aforesaid is set out as hereinbelow.

"appellant has placed on record an affidavit of Mr. T. R. Gupta, president of the Akhil Bhartiya Mahajan Sheromani Sabha whereby he has given his consent to the Court referring all the disputes to a Court commissioner/arbitrator of its choice as also for holding the election to the post of the President of Akhil Bhartiya Mahajan Sheromani Sabha and issue necessary directions in this regard. Mr. Razdan submits that though the affidavit, which has been filed, is of Mr. T. R. Gupta on behalf of the Sabha, he is also authorized to make the statement on behalf of mr. Rajinder Motiyal also. Mr. Jagdish Raj Mahajan, who was a party before the learned Single Judge, has not raised any objection with regard to the reference to these disputes. Let the statements of both the counsel be recorded. Statement of Mr. T. N. Razdan, counsel for the appellants and Mr. Rakesh Mahajan, counsel for the respondents has been separately recorded. The affidavit filed by Mr. T. R. Gupta and Mr. Dharamvir Singh are taken on record. In view of the statements and the affidavits filed, we appoint Justice r. C. Chopra, N-113, Greater Kailash Part-I, New Delhi, a retired Judge of this court to act as the arbitrator/court Commissioner to do the following: 1. To determine whether life members/working committee members enrolled after the cutoff date i. e. 15. 9. 1997 are validly enrolled and if so, are they entitled to participate in the elections going to be held.

2. To conduct the elections of the President of the Akhil Bhartiya mahajan Shiromani Sabha in accordance with the provisions of the bye laws of the Sabha. The" Arbitrator/court Commissioner is also empowered to decide any other matter incidental to the above and to take such further steps as are necessary to accomplish the aforesaid object. The fee of the Arbitra-tor/court Commissioner shall be fixed by him and shall be shared by both the parties equally.-The status quo as of now shall be maintained subject to such further directions as may be given by the Arbitrator/court Commissioner. The Arbitrator/court Commissioner is re-quested to see that the elections are held at its earliest and goodwill and harmony is restored within the community. If possible, the entire exercise be completed within three months. The appeal stands disposed of in the above terms. "

(2) JUSTICE R. C. Chopra (retd.) pronounced an 'award' on 28th April. 2008 as 'sole Arbitrator' and found that out of 413 persons who were claimed to be members of Akhil Bhartiya Mahajan Shiromani Sabha, 399 were enrolled after the 'cut off date and their enrolment appeared to have been done only to gain undue advantage in election of President which had not been held after 1997 and held their enrolment contrary to rules and further held the said persons not entitled to participate in the election to be held by him. He issued further directions for holding of elections.

(3) THE grievance of the senior counsel for the Respondents is that owing to pendency of these petitions, Justice R. C. Chopra (retd.) is not proceeding with the holding of elections.

(4) OMP No. 293/2008 has been preferred by a party to RFA No. 48/2007 vide order in which appointment of Justice R. C. Chopra (retd.) was made. OMP No. 403/2008 has been preferred by some of the persons who were held not entitled to participate in the ensuing election. The said persons contend that they were not issued notice by the Arbitrator Justice R. C. Chopra (retd.)and the Award dated 28th April, 2008 is liable to be set aside on this ground.

(5) ON 1st August, 2008 when OMP No. 293/2008 had come up before this court, the counsel for the Petitioners therein was asked to satisfy as to how the order dated 28th April, 2008 is an 'award' within the meaning of arbitration and Conciliation Act, 1996 and as to how petitions under Section 34 of the Act are maintainable with respect thereto in as much as neither was there any arbitration agreement nor were the persons whose rights to be decided, parties to R. F. A. No. 48/2007 or before the Division Bench or before Justice R. C. Chopra (retd.).

(6) THE counsel for the Petitioners in OMP No. 293/2008 has submitted that if Justice R. C. Chopra (retd.) was intended to be a Court Commissioner only within the meaning of Order 26 of the Code of Civil Procedure, the iis in which he was appointed, that is, R. F. A. No. 48/2007 would not have been disposed of and would have been kept pending and the Court Commissioner would have been ordered to file his report in the said proceedings. Ho has drawn attention to the fact that petition under Section 17 of the Arbitration and Conciliation Act, 1996 was moved before Justice R. C. Chopra (retd.). He has also relied upon C. M. Nos. 13848-13849/2007 in disposed of R. F. A. No. 48/2007 and the order dated 9th October, 2007 made therein, copies whereof have been handed over in the court, to contend that while relief was pressed in the application that the appointment should be as a Court Commissioner only and not as an Arbitrator, the application was withdrawn.

(7) THE senior counsel for the Petitioner, in OMP No. 403/2008 has inter alia stated that the Petitioners are willing to treat the 'award' dated 28th April, 2008 as an Arbitral Award and are willing to submit to Arbitration but their grievance is that they were not heard and not given notice and thus, the Award dated 28th April, 2008 be set aside and the matter be remitted under Section 34 (4) of the Arbitration and Conciliation Act, 1996 to the Arbitrator. On query as to how the same constituted an 'award' within the meaning of Arbitration Act, the senior counsel for the Petitioners has drawn attention to Section 89 of the CPC and urged that since the petitioners in OMP No. 403/2008 are members of the Sabha which had consented to Arbitration, they are also bound by the Agreement of the Sabha in R. F. A. No. 48/2007 of appointment of Justice R. C. Chopra (retd.) as arbitrator.

(8) I have enquired from the counsel for the Respondents in both the petitions, if they are willing to the disputes now raised being resolved by justice R. C. Chopra (retd.) already appointed by the Division Bench but the respondents are not agreeable.

(9) R. F. A. No. 48/2007 was preferred against order dated 2nd July, 2007 of dismissal of CS (OS) No. 1716/2006 filed by the Respondents herein inter alia for declaration that the enrolment of members was illegal and to restrain the executives of Sabha from acting. The Hon'ble Single Judge on 2nd July, 2007 dismissed the suit with directions to hold election in accordance with the constitution of the Sabha.

(10) THE Division Bench, with a view to resolve all disputes as to who, as per the constitution of Sabha was a member entitled to vote and who was not, and further to ensure holding of elections, after recording consent of parties before it, referred for information to Justice R. C. Chopra (retd.). The reference was of matter in dispute between the parties to the suit in appeal. The intent was to bring the controversy to an end and of the parties being bound by the finding/statement of Justice R. C. Chopra (retd.) and to expedite holding of elections. The elections could be held only if there was to be no further challenge to finding of Justice R. C. Chopra (retd.). Mere use of nomenclature 'arbitrator' will not constitute reference to Arbitration.

(11) FOR the Division Bench to have intended to appoint Justice R. C. Chopra (retd.) as an Arbitrator, it was essential to have an Arbitration agreement within the meaning of Section 7 of the Act, of the parties to agree to Arbitration. A copy of the statements recorded before the Division Bench on 29th August, 2007, has been handed over and which does not disclose any agreement of the parties to Arbitration. For the court, in exercise of the powers under Section 89 of the CPC also, to refer the parties to Arbitration, an Arbitration Agreement is a must in as much as Section 89 (2) (a) provides that the provisions of Arbitration and Conciliation Act, 1996 shall apply to such a reference. In the absence of an Arbitration Agreement, I find it difficult to hold that Justice R. C. Chopra (retd.) was intended to act as an arbitrator or could have made an Arbitral Award against which objections can be preferred under Section 34 of the Act. I, therefore, hold that the 'award' dated 28th April, 2008 is not an Arbitral Award.

(12) IN Hormusji v. Local Board, Karachi, AIR 1934 Sind 200, the following passage by Lord Esher in 56 LJQB 530 was quoted with approval "if it appears from the terms of the agreement, by which a matter is submitted to any person, that that which he is to do is to be in the nature of a judicial inquiry, and that the object is that he should hear the parties and decide the matter upon evidence to be led before him, there the person is an arbitrator. But if it appears that the object of appointing the person was not to settle differences after they had arisen, but to preclude differences from arising, there the person appointed is not an Arbitrator. There is an intermediate class of cases in which a person is appointed to determine disputes after they have arisen, but is not bound to hear evidence or argument. In those cases it may be more difficult to say whether the person is a valuer or an Arbitrator. They must be determined according to the circumstances in each particular instance by the intention of the parties. "

(13) SIMILARLY in M/s Garg Builders and Engineers v. U. P. Rajkiya nirman Nigam Limited (AIR 1995 Delhi 111). This court was concerned with the interpretation of the following clauses: "in the event of any dispute arising out of any of the conditions of this agreement, the matter shall be referred to the then unit incharge, whose decision shall be final and binding on both the parties" even though the clause used the expression of reference of dispute, the court held that the clause was only calculated to prevent disputes from arising and was akin to "finality clause" making provision for decision by an expert. No judicial determination of disputes was called for. The court held that mere agreement between the parties to be bound by the decision of a person does not constitute him as an arbitrator.

(14) THE discussion would be incomplete without reference to the dicta of the Apex Court in K. K. Modi v. K. N. Modi (1998) 3 SCC 573 where reference with approval was made to Commercial Arbitration 2nd Edition by Mustill and Boyd wherein the learned Author has observed that apart from arbitral tribunals, in the complex modern state, there exist persons entrusted by consent with the power to affect the legal rights of two parties inter se in the manner creating legally enforceable rights, but intended to do so by a procedure of ministerial and not a judicial nature.

(15) IN my opinion, the appointment of Justice R. C. Chopra (retd.) vide order dated 29th August, 2007 by the Division Bench was as a "referee" within the meaning of Section 20 of the Indian Evidence Act and wh

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ose decision on the matters in disputes referred to him was binding on the parties to the dispute as an admission. (16) THE apex court in Hirachand Kothari v. State of Rajasthan [1985 (Supp) (1) SCC 17] has discussed such appointment of Referee within the meaning of Section 20 of the Evidence Act. (17) IN Ram Narain and Others v. Santosh Kumar and Others (AIR 1952 Punjab 344) also, the expression 'arbitration Agreement' was used but it was held that the Agreement was made not in the nature of a reference to Arbitration but a reference to a referee and as such the parties were bound by the finding of the said referee, (18) IN my view, the parties before the Division Bench did not intend to have the disputes arbitrated. If that was to be so, the Division Bench would not have used the expression "arbitrator/court Commissioner" for Justice r. C. Chopra. Further if the finding of justice R. C. Chopra on the dispute of membership was not intended to bind the parties, the Division Bench would not have authorized/empowered Justice R. C. Chopra to hold the election also. (19) SINCE I have held that there was no arbitration, these petitions under Section 34 of the Arbitration Act, 1996 are held to be not maintainable and dismissed.