Delhi High Court: C. HARI SHANKAR, J., dismissed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘the Act’) filed against the Arbitrator’s Award , wherein, the petitioner was directed to execute a sale deed of the disputed property in favour of the present respondent on the ground that the contentions raised by the petitioners should have been raised before the Arbitral Tribunal and that reappreciation of facts of a dispute was not permitted under Section 34 of the Act.
The present respondents had instituted arbitral proceedings against the petitioners seeking specific performance of an agreement to sell (‘ATS’) pertaining to a land in New Delhi (‘disputed property’). Vide the impugned Award, the Arbitrator allowed the claim of the respondents and directed the petitioners to execute a sale deed in respect of the disputed property in favour of respondent. Aggrieved by the Award, the petitioners approached the Court challenging the same under Section 34 of the Act.
The petitioners contended that the arbitral proceedings had been conducted ex parte as the petitioners were unaware of any proceedings. The petitioners submitted that they became aware of the arbitral proceedings when the respondents filed the execution petition.
It was further averred by the petitioners that the ATS could not have been executed at all, as the allotment letter whereunder the disputed property was allotted to the original allottee, contained a specific covenant prohibiting further transfer of the property by the original allottee. It was further submitted that the ATS could not create any right in favour of respondent as it preceded the allotment of the disputed property in favour of the original allottee.
The respondents contended that the cheques by which payment was made to the petitioners in terms of the ATS, as well as the receipts issued by the petitioners acknowledging receipt of the said payments, were all exhibited before the Arbitral Tribunal and had been placed before the Court as well.
The Court said that the submissions made by the petitioners were unacceptable as a perusal of arbitral records revealed that when the matter was listed on 16-11-2007 before the Arbitrator for the first time, not only was the appearance of petitioner 1 marked but his signature was also present on the page. The authenticity of the signature was not disputed by petitioner 1, hence, the Court said that petitioner 1 was well aware of the proceedings yet chose to remain absent, at his own peril. The Court stated that since petitioners neither filed its statement of defence (‘SoD’) nor lead any evidence, all averments under the statement of claim (‘SoC’) were deemed to have been admitted by petitioners.
It was argued by the petitioners that the original allotment letter was never a part of the Arbitral proceedings however reference to the letter could be found in the impugned award. The Court said that the petitioners neither placed such allotment letter on record, nor did they plead before the Arbitrator that the allotment letter contained a non-transfer covenant, therefore, the issue could not be raised in proceedings under Section 34.
The Court said that the record revealed that upon being confronted, petitioner 1 specifically admitted receipt of payments from respondent, in terms of the ATS, in respect of the disputed property, therefore, the petitioners had no right to question the validity of the ATS or the right of the respondents to seek specific performance thereof.
The Court noted that it was evident from the submissions made by the petitioners that they sought for reappreciation of the entire facts of the dispute. The Court said it is trite law the Court could not reappreciate facts under Section 34 of the Act.
The Court observed that the objections raised by the petitioners ought to have been raised by them before the Arbitrator. The Court said that by no stretch of imagination could submissions advanced by petitioners be warrant consideration, while examining the impugned arbitral award under Section 34 of the Act. The Court said that Section 34, has limited scope, and is certainly not intended to be used as a tool for a litigant to desist from participating in the arbitral proceedings, despite being fully aware thereof, and, thereafter, seek a second bite at the arbitral cherry.
In the given circumstances, the Court dismissed the petition while holding it to be devoid of merit.
[Krishan Kumar v. Shakuntla Agency Pvt. Ltd., 2024 SCC OnLine Del 5081, decided on: 25-07-2024]
Advocates who appeared in this case:
Advocate for the petitioner: Rahul Dubey, Advocate
Advocate respondent: Saurabh Mishra, Aashnaa Bhatia, Abhinav Pandey, Advocates
Buy Arbitration and Conciliation Act, 1996 HERE
