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Sanjeev C Bordia and 1 Vs Sunilkumar Mohansingh Bordia - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtGujarat High Court
Decided On
Case NumberFA/4056/2008 72/72 JUDGMENT ; FIRST APPEAL No. 4056 of 2008 ; CIVIL APPLICATION No. 9959 of 2008 ; In FIRST APPEAL No. 4056 of 2008 ; CIVIL APPLICATION No. 10990 of 2009 ;
Judge
Acts Arbitration and Conciliation Act, 1996 Section 34, ; Hotel and Lodging Houses Rates Control Act, 1947 - Section 28. ; Indian Partnership Act - Section 14 ,
AppellantSanjeev C Bordia and 1
RespondentSunilkumar Mohansingh Bordia
Cases ReferredGovindram Salamtrai Bachani v. Dharampal Amarnath Puri
Excerpt:
[r.v. raveendran; a. k. patnaik] indian penal code section 452 - house-trespass after preparation for hurt, assault or wrongful restraint -- after investigation, the police filed two challans on 02.02.2006 before the judicial magistrate, first class, ludhiana. after further investigation, the superintendent of police, city-ii, ludhiana, submitted his report to the deputy inspector general of police, ludhiana range. the relevant portion of the report of the superintendent of police, city-ii, ludhiana, which contains his conclusions after further investigation, is extracted herein below: "i found during my investigation that mohan singh, son of shri sher singh , dharmatma singh, harpal singh, jagdev singh and bhupinder singh, sons of mohan singh, residents of pullanwal, sold one plot.....1. this appeal is directed against the judgment and order dated 14/8/2008 rendered by ld. judge, city civil court no. 10, ahmedabad [for short 'the city court'] in civil misc. application no. 63/2008, whereby the city court allowed said application filed by the respondent herein under section 34 of the arbitration and conciliation act, 1996 [for short 'the act'] and set aside the award dated 02/12/2007 rendered by the ld. sole arbitrator. the original claimants, in the result, preferred this appeal. thus, the appellants were original claimants and the respondent was original respondent in the said arbitration proceedings and, therefore, for the sake of convenience, the appellants and the respondent shall be hereinafter referred to as 'the claimants' and 'the respondent' respectively.2......
Judgment:
1. This appeal is directed against the judgment and order dated 14/8/2008 rendered by Ld. Judge, City Civil Court No. 10, Ahmedabad [for short 'the City Court'] in Civil Misc. Application No. 63/2008, whereby the City Court allowed said application filed by the respondent herein under section 34 of the Arbitration and Conciliation Act, 1996 [for short 'the Act'] and set aside the award dated 02/12/2007 rendered by the Ld. Sole Arbitrator. The original claimants, in the result, preferred this appeal. Thus, the appellants were original claimants and the respondent was original respondent in the said arbitration proceedings and, therefore, for the sake of convenience, the appellants and the respondent shall be hereinafter referred to as 'the claimants' and 'the respondent' respectively.

2. Both the parties happened to be partners of a partnership firm, which carried on business in clothes in the name and style of M/s. Sultansingh Mohansingh. A dispute took place amongst the partners, resulting into virtually bringing the business to a standstill with effect from April 2005. Notice exchanges took place between the partners. The claimants invoked the arbitration clause for appointment of Arbitrator to resolve their disputes regarding dissolution of the firm, accounts thereof and their 50% share in the property of the firm including the premises in question. The firm was carrying on its business in a rented premises situated at D/3-A, Maskati Market, Tower Gate, Ahmedabad, [the subject premises] belonging to Maskati Charitable Properties Trust [for short 'the Maskati Trust']. Since there was no unanimity regarding the name of Arbitrator, the claimants filed a petition being Arbitration Petition No. 3/2007 against the respondent in this Court. This Court vide order dated 23/3/2007 appointed the Ld. Sole Arbitrator to resolve all the disputes between the parties. The Ld. Arbitrator, after considering relevant documents produced by both the sides and considering the submissions advanced on behalf of both the sides, passed the award dated 2/12/2007 whereby the partnership firm in the name and style of M/s. Sultansingh Mohansingh was declared to have stood dissolved with effect from 17/8/2006. It was further declared that the partners would have share in the profits and losses as well as the assets of the firm in the proportion, namely claimant no. 1 40%, claimant no. 2 10% and respondent 50%. It was further declared that assets of the firm consist of the tenancy right in the subject premises situated in Maskati Market. It was further declared that the claimants jointly on one hand would take half share in the tenancy rights of the subject premises and the respondent will take half share in the tenancy rights of the subject premises by partitioning the subject premises in equal proportion in area. It was observed that although there was no likelihood of any dispute between the parties with regard to such partition of the shop premises, in case there arises any dispute, the tenancy rights of the shop premises will be taken by either the claimants jointly on one side or respondent on the other side as per the highest bid in the inter-se auction to be held and the value of the tenancy rights [it would include goodwill] will be divided by the parties according to their shares noted hereinabove. The respondent, who was claiming his exclusive right in the subject premises and, therefore, he challenged the award under section 34 of the Act before the City Court.

3. The City Court, by impugned judgment and order dated 14/8/2008 set aside the award mainly on the ground that the Ld. Arbitrator was not competent to resolve dispute regarding the tenancy rights as according to the City Court, the dispute can only be resolved regarding the tenancy rights by the Court of Small Causes at Ahmedabad as provided under section 28 of the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947 [for short 'the Bombay Rent Act']. In arriving at such conclusion, the City Court relied upon certain decisions, which shall be discussed in this judgment at its appropriate time. The City Court, therefore, observed that when the Ld. Arbitrator had no jurisdiction to hear and decide the dispute of such nature, the award cannot be sustained and deserves to be set aside under section 34 of the Act. In arriving at such conclusion, in para. 35 of the impugned judgment and order, the City Court observed as under :

"I do not find any justification in the award itself as to why the Ld. Arbitrator has exercised such jurisdiction when it is clearly barred by the provisions of the Rent Act."

4. The City Court further criticized the award passed by the Ld. Arbitrator and more particularly relying upon certain observations made by the Ld. Arbitrator on internal page 30 of the award to the effect that "Shri Mohansingh Sultansingh might have brought said properties once-again in the assets of the firm of Sultansingh Mohansingh either for consideration or by way of relinquishment of his rights" and observed that the Ld. Arbitrator could not have decided the matter on presumption, but there should be clear cut evidence. In para. 38 in the impugned judgment and order, the City Court branded the award passed by the Ld. Arbitrator as against the public policy and against the provisions of the Bombay Rent Act and held that the award, therefore, cannot be sustained in the eyes of law and requires to be set aside. This has given rise to the instant appeal.

5. Mr. Mihir Joshi, Ld. Sr. Counsel with Mr. V M Patel, Ld. Advocate for the appellants original claimants, at the outset, submitted that the impugned judgment and order rendered by the City Court is outright contrary to law and facts on record. It is stated that there is no dispute that while exercising jurisdiction under section 34 of the Act, the City Court cannot sit in appeal over the award passed by the Ld. Arbitrator. The City Court has only to consider whether the award passed by the Ld. Arbitrator is required to be set aside on any of the grounds mentioned in section 34 of the Act. Mr. Mihir Joshi, Ld. Sr. Counsel assailed the impugned judgment and order passed by the City Court by submitting that virtually while setting aside the award, the City Court appears to have exercised appellate powers.

5.1. Mr. Mihir Joshi, Ld. Sr. Counsel submitted that the City Court seriously erred in coming to the conclusion that the dispute regarding the tenancy right in the instant case, was required to be dealt with by the Court of Small Causes, Ahmedabad and not by the Ld. Arbitrator. The City Court, while arriving at such conclusion, relied upon section 28 of the Bombay Rent Act. Mr. Mihir Joshi, Ld. Sr. Counsel submitted that the bare perusal of section 28 would suggest that any dispute regarding recovery of the rent or possession of any rented premises, or to decide any application made under the Bombay Rent Act or to deal with any claim or incident arising out of the Bombay Rent Act between a landlord and a tenant shall have to be heard and decided by the Court of Small Causes so far as Ahmedabad City is concerned. It is submitted that in the instant case, the dispute regarding the tenancy rights admittedly is not between the landlord [Maskati Market Trust] and the partnership firm or any of its partners. In the instant case, the only dispute is inter-se amongst the partners as to whether the tenancy rights are assets of the partnership firm or those rights exclusively belong to the respondent. Mr. Mihir Joshi, Ld. Sr. Counsel, therefore, submitted that what the Ld. Arbitrator was called upon to decide was only the issue 'as to whether the tenancy right was asset of the partnership firm or not, as contemplated under section 14 of the Indian Partnership Act. There was no dispute regarding possession or rent between the landlord and the tenant. It is, therefore, submitted that the City Court erred in coming to the conclusion that the dispute involved in this matter, falls within the four corners of section 28 of the Bombay Rent Act.

5.2. Mr. Mihir Joshi, Ld. Sr. Counsel further submitted that in the instant case, during the course of arbitral proceeding, the respondent did not challenge the jurisdiction of the Ld. Arbitrator. When the claimants filed petition before this Court for appointment of Ld. Arbitrator and this Court, upon broad consensus arrived at between both the parties, passed order on 23/3/2007, even before this Court, at the relevant time, the respondent did not raised any dispute regarding the jurisdiction of the Ld. Arbitrator to hear and decide such dispute. It is submitted that for the first time before the City Court, in Application under section 34 of the Act, the respondent raised such contention. However, it is submitted that in an application under section 34 of the Act, the respondent was at liberty to raise such contention, but on merits, the City Court erred in accepting such contention.

5.3. Mr. Mihir Joshi, Ld. Sr. Counsel submitted that the respondent mainly relied upon a dissolution deed dated 26/12/1969 as well as a writing dated 15/10/1968 to show that initially one Mohansingh Sultansingh [father of the respondent] and Chandansingh Sultansingh [father of the claimants] and other two partners were running a business in the subject premises itself at Ahmedabad in the name and style of a partnership firm M/s. Sultansingh Basantilal, which firm came to be dissolved on 22/10/1968 and in the dissolution deed, it is stated that the subject premises as well as a godown wherein the tenancy rights were of the said firm, were assigned to Mohansingh Sultansingh for the consideration of Rs.41,000/- and the said amount was received by the said firm. It is submitted that thereafter, by executing a partnership deed dated 24/11/1968 Mohansingh Sultansingh and Chandansingh Sultansingh formed a partnership firm in the name and style of M/s. Sultansingh Mohansingh and the business of the firm came to be continued in the subject premises itself. It is further submitted that the Maskati Market Trust and the partners of the firm executed a rent note wherein the subject premises inclusive of the ground floor portion of the subject premises is shown to have rented in favour of the partnership firm M/s. Sultansingh Mohansingh and the rent was fixed at Rs.684/- per month. That thus, the landlord [Maskati Market Trust] considered the partnership firm as its tenant and the firm used to pay the rent to the landlord. The rent receipts issued by the landlord are in the name of the firm. House tax as well as water tax electricity bills, telephone bills, etc., have been paid from the income of the firm and in the books of accounts maintained by the firm, entries regarding the payment thereof were regularly posted. It is further submitted that on 28/8/1998 sub-tenant Ramanlal Chhaganlal & Sons, who used to carry on business on the ground floor portion of the subject premises, vacated said portion and handed over the possession to the partnership firm i.e. M/s. Sultansingh Mohansingh. The partnership firm thereafter, in turn, handed over back the possession of the ground floor to the landlord and, therefore, the rent which was Rs.684/- per month came to be reduced to Rs.228/- per month.

5.4. Mr. Mihir Joshi, Ld. Sr. Counsel further submitted that the partners including the respondent, started various businesses in the subject premises in the names of Moradiya Textile, S.S. Textiles, Alok Sudha & Co., S. Mohansingh & Co., etc., and all these concerns operated their businesses in the subject premises itself and paid rent to the partnership firm M/s. Sultansingh Mohansingh in the years 2001-02, 2002-03 and 2003-04. It is submitted that before the Ld. Arbitrator, the claimants produced all the relevant documents including the books of accounts in support of the above mentioned facts. Mr. Mihir Joshi, Ld. Sr. Counsel submitted that as observed by the Ld. Arbitrator in the award, most of the documents filed by the parties were received in evidence by consent of the parties. Necessary pursises were filed by the parties before the Ld. Arbitrator to that effect. It is further submitted that before the Ld. Arbitrator, no dispute was raised by any party regarding the genuineness or otherwise of any document. The Ld. Arbitrator, while appreciating the defence of the respondent and more particularly pertaining to the recitals made in the dissolution deed of the earlier partnership firm, namely M/s. Sultansingh Basantilal, came to the conclusion that the claimants proved that the subject premises was rented to the partnership firm M/s. Sultansingh Mohansingh by its landlord Maskati Market Trust. Alternative case of the claimants was that deceased Mohansingh Sultansingh waived / relinquished either expressly or impliedly his tenancy rights to the said partnership and Ld. Arbitrator observed that in view of the fact that the landlord considered the partnership firm itself as its tenant, the question whether deceased Mohansingh Sultansingh either waived or relinquished or surrendered his tenancy rights to the partnership firm does not arise, but alternatively it was observed that if at all said issue was required to be replied, then the finding would be that Mohansingh Sultansingh relinquished the tenancy rights of the subject premises to the partnership firm. It is submitted that the City Court in the impugned judgment and order only picked up one sentence from internal page no. 30 of the award that the Ld. Arbitrator concluded that Mohansingh Sultansingh might have brought the said properties once again in the assets of the said firm. But the City Court failed to look at internal page 35 in the award, wherein the Ld. Arbitrator categorically observed that Mohansingh Sultansingh relinquished the tenancy rights in favour of the firm. The Ld. Arbitrator, therefore, observed that "Viewed the facts in any manner, they give out a picture that the tenancy rights of the subject premises belonged to the firm."

5.5. Mr. Mihir Joshi, Ld. Sr. Counsel, therefore, submitted that the City Court erred in interfering with the award passed by the Ld. Arbitrator. None of the grounds available under section 34 of the Act can be attracted in this matter. Ultimately, it is submitted that the appeal may be allowed and the impugned judgment and order rendered by the City Court be set aside and award passed by the Ld. Arbitrator be upheld and confirmed.

6. Per contra, Mr. Sunit S Shah, learned advocate for Mr. RJ Dave, learned advocate for the respondent supported the impugned judgment and order rendered by the City Court and submitted that the City Court rightly came to the conclusion that the Ld. Arbitrator had no jurisdiction to hear and settle the dispute. My attention was drawn to the fact that the Ld. Arbitrator in his award determined the ownership of the tenancy right and observed that the partnership firm was the tenant. Mr. Shah, Ld. Advocate relied upon section 28 of the Bombay Rent Act and stated that so far as the property situated in Ahmedabad is concerned, only Court of Small Causes at Ahmedabad has the exclusive jurisdiction in this matter and neither ordinary civil Court nor even the Ld. Arbitrator could have dealt with such matter. It is submitted that section 28 of the Bombay Rent Act is not confined only to the dispute regarding recovery of possession of the rented premises or fixation of rent, but even the dispute of this nature involved in the instant case, shall have to be resolved by the Court of Small Causes at Ahmedabad. In support of this submission, Mr. Shah, Ld. Advocate relied upon certain decisions, which shall be discussed in this judgment at its appropriate time.

6.1. Mr. Shah, Ld. Advocate for the respondent submitted that the dispute regarding the jurisdiction of the Ld. Arbitrator can be raised at any time and, therefore, merely because before the Ld. Arbitrator, his jurisdiction was not challenged, did not preclude the respondent from raising such contention in an application before the City Court under section 34 of the Act. Mr. Shah, therefore, submitted that the City Court was perfectly justified in coming to the conclusion that the Ld. Arbitrator had no jurisdiction to resolve the dispute.

6.2. On merits, Mr. Shah, Ld. Advocate for the respondent submitted that the Ld. Arbitrator did not consider important documents, namely the dissolution deed of earlier partnership firm as well as a writing dated 15/10/1968 executed by the partners of said dissolved partnership firm, whereby the subject premises as well as one godown at the time of dissolution of the earlier partnership firm, namely M/s. Sultansingh Basantilal, came to the share of the father of respondent, namely Mohansingh Sultansingh and for that, deceased Mohansingh Sultansingh had paid Rs.41,000/- in the year 1968 and the said amount was deposited by him in the firm. It is submitted that even the father of the claimants, namely Chandansingh Sultansingh, at the time of dissolution of said firm M/s. Sultansingh Basantilal received certain properties by virtue of said dissolution deed as well as a writing dated 15/10/1968. So far as the subject premises is concerned, it is, therefore, submitted that deceased father of the respondent, Mohansingh Sultansingh had paid Rs.41,000/- and the tenancy rights in the subject premises came in the share of Mohansingh Sultansingh and after his death, the rights devolved in the respondent. It is, therefore, submitted by Mr. Shah, Ld. Advocate for the respondent that the Ld. Arbitrator, ignoring such vital documentary evidence, erred in coming to the conclusion that the partnership firm M/s. Sultansingh Mohansingh was the tenant of the subject premises and not the respondent. Mr. Shah submitted that even as per sections 91 and 92 of the Evidence Act, no oral evidence in conflict with the clear documentary evidence is admissible in evidence. Therefore, Ld. Arbitrator erred in coming to the conclusion that by virtue of the oral evidence so also considering the conduct of Mohansingh Sultansingh as well as of his son, the respondent herein, they have waived/relinquished/surrendered/forfeited either expressly or impliedly the tenancy rights in the subject premises.

6.3. Mr. Shah, Ld. Advocate for the respondent submitted that the Ld. Arbitrator placed emphasis upon a rent note, copies produced by the claimants in the paper book at page 15 and by the respondent at page 89, wherein only the seal of Maskati Charitable Properties Trust is visible and the same is purported to be signed by its Secretary and no-where there are signatures of the partners of M/s. Sultansingh Mohansingh firm. However, perusing the said rent note, it is stated that even in it, the name of Mohansingh Sultansingh is referred as the occupier. Mr. Shah further submitted that the Ld. Arbitrator placed reliance upon a surrender of possession deed, whereby it is stated that sub-tenant M/s. Ramanlal Chhaganlal & Sons surrendered possession of ground floor portion of the subject premises to the firm M/s. Sultansingh Mohansingh on 28/8/1998. Mr. Shah submitted that in the said document, no-where there is the signature of either Mohansingh Sultansingh or his son, the respondent herein. It is submitted that the Ld. Arbitrator accepted the case of the claimants that thereafter, the ground floor portion of the subject premises came to be surrendered, in turn by the partnership firm M/s. Sultansingh Mohansingh, to the landlord and thereafter, the monthly rent of Rs.684/- came to be reduced to Rs.228/-, but no such surrender of possession deed came to be produced by the claimants in this matter. It is, therefore, submitted that the Ld. Arbitrator seriously erred in considering this circumstance as an evidence showing relinquishment or waiver of the tenancy rights on the part of the respondent.

6.4. Mr. Shah, Ld. Advocate for the respondent relied upon the partnership deed dated 24/11/1968 by which the partnership firm in the name and style of M/s. Sultansingh Mohansingh came to be formed by two partners, namely Mohansingh Sultansingh [father of the respondent] and Chandansingh Sultansingh [father of the claimants]. It is submitted that even in the partnership deed, nothing is specifically stated that Mohansingh brought the tenancy rights in the subject premises to the stock of the partnership firm as contemplated under section 14 of the Partnership Act. It is submitted that thereafter, from time to time, on account of death of either Mohansingh or Chandansingh, respective heirs of deceased partners were inducted as partners in the firm and, therefore, subsequent partnership deed came to be executed, but in none of the deeds, it has been specifically stated that the tenancy rights in the subject premises came to be brought to the stock of the firm by Mohansingh Sultansingh. Mr. Shah submitted that there are decisions rendered by Hon'ble the Apex Court and other High Courts including this High Court that mere user of the premises by the firm or mere payment of rent from the fund of any partnership firm or mere payment of property tax, etc., from the fund of such partnership firm cannot be the test or evidence that said premises either belongs to the firm or that said partnership firm is the tenant of the premises used for its business. Mr. Shah, Ld. Advocate for the respondent, therefore, submitted that the Ld. Arbitrator erred in coming to the conclusion that the partnership firm was the tenant of the subject premises because rent was paid from the fund of the partnership firm as well as other charges, namely property tax, water tax, etc., came to be paid by the partnership firm.

6.5. Mr. Shah, Ld. Advocate for the respondent submitted that in the award itself, the Ld. Arbitrator observed that Shri Mohansingh Sultansingh might have brought in such properties once-again in the assets of the firm of Sultansingh Mohansingh either for consideration or by way of relinquishment of his rights. Thus, the award passed by the Ld. Arbitrator is based upon mere assumption and presumption. The partnership deed is completely silent on the vital aspect that Mohansingh Sultansingh waived and relinquished his tenancy rights in the subject premises and at the time of incorporation of the firm, he brought those tenancy rights in the stock and assets of the partnership firm. Mr. Shah drew my attention to affidavit-in-reply filed by the respondent in Civil Application No. 9959/2008 in First Appeal No. 4056/2008 and submitted that in the affidavit-in-reply, the respondent has elaborately narrated his contentions in great detail, which may be considered. In his affidavit-in-reply, the respondent has narrated and dealt with all the previous documents including the dissolution deed of earlier partnership firm M/s. Sultansingh Basantilal, whereby Mohansingh Sultansingh received, upon payment of Rs.41,000/-, the tenancy rights in his share and said dissolution deed and the writing dated 15/10/1968 came to be signed by all the partners including deceased Chandansingh Sultansingh, father of the claimants. That, therefore, now the claimants are estopped from saying that subsequently formed partnership firm M/s. Sultansingh Mohansingh held the tenancy rights in the subject premises and not the respondent.

6.6. Mr. Shah, Ld. Advocate for the respondent, therefore, submitted that once the vital piece of evidence is ignored by the Ld. Arbitrator and the relevant documentary evidence is not considered in its true perspective, the award passed by the Ld. Arbitrator is liable to be set aside as provided under section 34 of the Act.

6.7. Mr. Shah, Ld. Advocate for the respondent, therefore, submitted that there is no ground or any reason for this Court to interfere with the impugned judgment and order passed by the City Court and the appeal may be dismissed.

7. At the outset, it is required to be noted that the proceedings before the City Court was under section 34 of the Act regarding setting aside arbitral award. Under section 34 of the Act, certain circumstances are enumerated and upon happening of all or any of the circumstances, the arbitral award may be set aside. In case of Delhi Development Authority v/s. R.S. Sharma & Co., reported in [2008] 13 S.C.C. 80, Hon'ble the Apex Court, after takaing into consideration previous decisions, in para. 21, observed as under :-

"21. From the above decisions, the following principles emerge :

[a] An Award, which is [I] contrary to substantive provisions of law; or

[ii] the provisions of the Arbitration and Conciliation Act, 1996; or

[iii] against the terms of the respective contract; or

[iv] patently illegal, or

[v] prejudicial to the rights of the parties, is open to interference by the Court u/s. 34[2] of the Act.

[b] Award could be set aside if it is contrary to : [a] fundamental policy of Indian Law; or

[b] the interest of India; or

[c] justice or morality;

[c] The Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court.

[d] It is open to the Court to consider whether the Award is against the specific terms of contract and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India."

8. In the case of Oil & Natural Gas Corporation Ltd. v/s. Saw Pipes Ltd., reported in [2003] 5 S.C.C. 705, while arriving at conclusion in para. 74, Hon'ble the Apex Court observed as under :-

"74. In the result, it is held that :

A[1] The court can set aside the arbitral award under Section 34[2] of the Act if the party making the application furnishes proof that :

[i] a party was under some incapacity, or

[ii] the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

[iii] the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present this case; or

[iv] the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration.

[2] The court may set aside the award :

[i][a] if the composition of the Arbitral Tribunal was not in accordance with the agreement of the parties,

[b] failing such agreement, the composition of the Arbitral Tribunal was not in accordance with Part I of the Act,

[ii] if the arbitral procedure was not in accordance with :

[a] the agreement of the parties, or

[b] failing such agreement, the arbitral procedure was not in accordance with Part I of the Act.

However, exception for setting aside the award on the ground of composition of Arbitral Tribunal or illegality of arbitral procedure is that the agreement should not be in conflict with the provisions of Part I of the Act from which parties cannot derogate.

[c] If the award passed by the Arbitral Tribunal is in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract.

[3] The award could be set aside if it is against the public policy of India, that is to say, if it is contrary to :

[a] fundamental policy of Indian law; or

[b] the interest of India; or

[c] justice or morality; or

[d] if it is patently illegal.

[4] It could be challenged :

[a] as provided under Section 13[5]; and

[b] Section 16[6] of the Act.

xxx xxx xxx xxx"

9. It has been submitted by the Ld. Counsel Mr. Shah for the respondent that if an arbitrator ignores any material document which throws abundant light on the controversy to help a just and fair decision or refusal by Arbitrator to consider provisions of contract particularly those which deal with rights and liabilities of the parties or awarding damages ignoring the terms of the contract amounts to legal misconduct on the part of an arbitrator. To substantiate this submission, reliance was placed upon the cases of K.P. Poulose v/s. State of Kerala reported in AIR 1975 S.C. 1259, M.D. Army Welfare Housing Organisation v/s. Sumangal Services Pvt. Ltd. Reported in AIR 2004 S.C. 1344 and Ramnath International Construction [P] Ltd. v/s. Union of India reported in [2007] 2 S.C.C. 453.

10. Now in light of the principles established by Hon'ble the Apex Court in the above referred decisions and in light of the provisions contained in section 34 of the Act, it is required to be considered as to whether the City Court committed any error in setting aside the award passed by the Ld. Arbitrator or not. There is no dispute that while exercising powers under section 34 of the Act, the Court does not sit in appeal over the award passed by the Ld. Arbitrator. Thus, the function and powers of appellate Court are different than those exercised by the Court while deciding a matter arising under section 34 of the Act. In the instant case, the City Court in the impugned judgment and order set aside the award mainly on the ground that the Ld. Arbitrator had no power or jurisdiction to hear and resolve such dispute wherein the question of tenancy rights was involved. The City Court, while arriving at such conclusion, took into consideration section 28 of the Bombay Rent Act. Relevant part of section 28 of the Bombay Rent Act runs as under :-

"28[1] Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceedings would not, but for this provision, be within its jurisdiction,

[a] in the city of Ahmedabad, the Court of Small Causes at Ahmedabad,

[aa] xxx xxx xxx xxx

[b] xxx xxx xxx xxx

shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of the rent or possession of any premises to which any of the provisions of this part apply and to decide any application made under this Act and to deal any claim or question arising out of this Act or any of its provisions and subject to the provisions of sub section [2], no other court shall have jurisdiction to entertain any such suit proceeding or application or to deal with such claim or question."

11. Now considering the relevant provisions of section 28 of the Bombay Rent Act, the first and the foremost aspect which is required to be considered is that such suit or proceedings shall be between a landlord and a tenant. Such suit or proceedings shall be regarding recovery of rent or possession of the demised premises to which any of the provisions of the Act applies or any application between them made under this Act and to deal with any claim or question arising out of this Act, and to hear and decide such matters, no other Court shall have jurisdiction except in the City of Ahmedabad, court of Small Causes at Ahmedabad. Now in the instant case, there is no dispute that the controversy was between the partners of the partnership firm. To put it differently, in the instant case, there was no dispute between landlord on the one hand and partnership firm or its partners on the other hand. It is further pertinent to note that there was no dispute regarding fixation of rent or recovery of possession of the demised premises by the landlord. In the instant case, what the Ld. Arbitrator was called upon to decide, was whether the tenancy rights in the subject premises is the asset of the partnership firm or an individual right of the respondent.

12. It is further pertinent to note that in the instant case, both the parties agreed to settle all their disputes including their dispute as to tenancy rights in the subject premises through arbitration. Since initially there was no consensus between the parties regarding the name of the Arbitrator, the claimants preferred Arbitration Petition No. 3/2007 before this Court and vide order dated 23/3/2007, upon a consensus arrived at between both the sides, the Ld. Arbitrator was appointed as Sole Arbitrator to resolve all the disputes between the parties. The said application was accordingly disposed of. Thus, it is clear that at that point of time, on the part of the respondent, no dispute was raised that the controversy regarding tenancy rights could not have been resolved by the Arbitrator, but could only be resolved by the Court of Small Causes, Ahmedabad. After the aforesaid order came to be passed by this Court, the Ld. Arbitrator commenced the arbitral proceedings. Both the parties appeared before the Ld. Arbitrator and adduced their evidence. Considering the materials on record and the submissions advanced by both the sides, the Ld. Arbitrator pronounced his award. Again it is clear that before the Ld. Arbitrator, the respondent did not challenge the competency or jurisdiction of the Ld. Arbitrator to hear and resolve the dispute. If such dispute was raised before the Ld. Arbitrator by the respondent under section 16 of the Act, the Ld. Arbitrator could have decided this issue. However, nothing whatsoever was done, but after the Ld. Arbitrator pronounced his award and the tenancy rights in the subject premises was held to be of the partnership firm and both the claimants on one set held to be entitled to 50% share and the respondent was held to be entitled to remaining 50% share in the tenancy right, the respondent challenged said award before the City Court under section 34 of the Act and for the first time, raised the dispute regarding competency and jurisdiction of the Ld. Arbitrator.

13. However, this does not preclude the respondent from raising the dispute for the first time before the City Court in an application under section 34 of the Act. I agree with the submission made by Mr. Shah, learned advocate for the respondent that if there is inherent lack of jurisdiction, the consent of parties does not confer such jurisdiction in a Court or an authority. However, the above facts narrated in the above para., are only relevant to show that once the respondent's individual claim in the tenancy rights in the subject premises was not accepted by the Ld. Arbitrator, the respondent raised the dispute regarding competency and jurisdiction of the Ld. Arbitrator before the City Court.

14. As stated above, the dispute involved in this matter was not between landlord and tenant, but between the parties inter-se, City Court erred in holding that the Ld. Arbitrator was not competent to hear and resolve such dispute and he had no such jurisdiction.

15. The City Court in the impugned judgment, placed reliance upon a case of Natraj Studios [P] Ltd. v/s. Navrang Studios reported in AIR 1981 S.C. 537 and even at the time of arguments, Ld. Advocate Mr. Shah for the respondent relied upon this decision before this Court. In the said case, Navrang Studios a firm entered into an agreement with the appellant Natraj Studios, by which respondent Navrang Studios granted to the appellant Natraj Studios "leave and license" for the use of their two studios and other premises. The agreement was entered into on 28/3/1970. Section 15-A came to be inserted by amendment in the Bombay Rent Act and the effect of section 15-A was that any person who was in occupation of any premises on 1/2/1973 as a licensee was deemed to have become, for the purpose of the Bombay Rent Act, a tenant of the landlord. A suit came to be filed by appellant Natraj Studios for declaration in the Court of Small Causes, Bombay, praying that the appellant was a monthly tenant of two studios and all other structures and requested for fixation of standard rent and claimed other reliefs. Over and above the suit, the appellant filed an application under section 33 of the Arbitration Act [old Act] for declaration that the arbitration clause in the agreement was invalid, inoperative, etc., and the Bombay High Court dismissed said application on the ground that the Court had no jurisdiction to determine the alleged right, if any, of the appellant as a tenant. The respondent also filed an application before the Bombay High Court under section 8 of the Arbitration Act [old Act] praying that the 2^nd respondent might be appointed as the Sole Arbitrator to decide the dispute between the parties under the leave and license agreement. The Bombay High Court allowed said application. Both the orders passed by the Bombay High Court came to be challenged before Hon'ble the Apex Court.

15.1. Hon'ble the Apex Court, in said case, took into consideration amended section 15-A as well as section 28 of the Bombay Rent Act. In para. 18 in the decision, Hon'ble the Apex Court observed that the exclusive jurisdiction is given to the Court of Small Causes to entertain and try any suit or proceeding between a landlord and a tenant relating to recovery of rent or possession of premises and to try any suit or proceeding between a licensor and a licensee relating to recovery of license fee or charge or to decide any application made under the Bombay Rent Act. It was further observed that a person claiming to be landlord may sue his alleged tenant for possession of a building on grounds specified in the Bombay Rent Act. It was further observed that a person claiming to be owner of a building and alleging the defendant to be a trespasser will have to institute a suit in ordinary Civil Court. In the suit, if the defendant raises a plea as to his status as tenant of the landlord, such plea of the defendant will not straightway oust the jurisdiction of the ordinary Civil Court, but ultimately, if the plea of the defendant is accepted, the suit must fail on that ground. It was further observed that the question whether there is relationship as landlord and tenant between the parties or such jurisdictional questions may have to be determined by the ordinary Civil Court and if the jurisdictional question is decided in favour of the Court of exclusive jurisdiction [the Court of Small Causes], the suit or proceeding before the ordinary Civil Court must cease to the extent its jurisdiction is ousted.

15.2. In para. 20 in the said decision, Hon'ble the Apex Court relied upon earlier decision in the case of Vasudev Gopalkrishna Tamwekar v. The Board of Liquidators, Happy Home Cooperative Housing Society reported in AIR 1967 S.C. 369. In the said matter, there was a dispute between a housing society and one of its members. The question arose whether the relationship between the society and a member was that of a landlord and tenant. The dispute was referred to a Committee of Arbitrators under the Bombay Cooperative Societies Act and an award was made. When the award was sought to be executed, it was claimed that it was without jurisdiction as the question whether the relationship between the parties was that of landlord and tenant could only be determined by the Court of Small Causes under the Bombay Rent Act and not by any other authority. Hon'ble the Apex Court found that if the jurisdiction of the Arbitrators was to be excluded, the proceedings before the Arbitrators must be between the landlord and the tenant and must relate to the recovery of rent or possession of the premises. Where the person invoking the jurisdiction of the Court did not set up a claim that the opposite party was a tenant or a landlord, the defendant was not entitled to displace the jurisdiction of the ordinary Court by alleging the relationship of landlord and tenant between them. It was held that the jurisdiction was not ousted as soon as the contesting party raised a plea about the relationship of a landlord and a tenant.

15.3. Hon'ble the Apex Court in para. 22 in the said decision, again relied upon Govindram Salamtrai Bachani v. Dharampal Amarnath Puri reported in AIR 1951 Bombay 390, wherein it was observed that a question as to whether the defendant was a tenant or a licensee was jurisdictional question and had nothing to do with the Bombay Rent Act or any of its provisions. However, analyzing the earlier decisions, ultimately, considering the facts of the case before Hon'ble the Apex Court, in para. 24, it was observed that in the said case admittedly there was a relationship between the parties being that of licensor-landlord and licensee-tenant and the dispute between them relating to the possession of the licensed-demised premises, the Court of Small Causes alone has the jurisdiction and the Arbitrator has not to adjudicate upon the dispute between the parties.

16. Now the facts of the instant case are totally different. In the instant case, as stated above, the dispute is not between the landlord and the tenant and the question of fixation of rent or recovery of possession of the demised premises by the landlord, therefore, does not arise. In the impugned judgment, the City Court, therefore, erred in applying the ratio laid down in this decision in the facts and circumstances of the instant case. As stated above, in the instant case, the dispute is between the partners as to whether the tenancy right in the subject premises are of the firm or individually belonged to one of the partners.

17. Mr. Mihir Joshi, Ld. Sr. Counsel for the appellants-claimants relied upon a decision rendered in the case of Shreedhar Govind Kamerkar v/s. Yesahwant Govind Kamerkar reported in [2006] 13 S.C.C.

481. Considering the facts of said case, there was a dispute between two brothers, who happened to be partners in a firm, regarding tenancy rights in the premises wherein the partnership business was carrying on. In the suit, the respondent alleged the tenancy rights in the shop of the partnership firm. The suit came to be dismissed. However, in an appeal preferred by the respondent, the appeal came to be allowed and so far as tenancy rights were concerned, the appellate Court held that the parties had equal tenancy rights in the premises. In an appeal preferred before the High Court, it was observed that in the deed of dissolution of the partnership firm, it was clearly mentioned that the tenancy right was a part of asset of the partnership firm. It was further observed that the royalty received in respect of the said tenanted premises used to be deposited in the partnership firm account. Before Hon'ble the Apex Court, on behalf of the appellant, it was urged that there was a clear finding of the Civil Court that the premises in question had been acquired by the appellant in his individual capacity and it was the appellant who had obtained possession thereof from one licensee and thus it was the appellant who was independent owner of the tenancy rights. In the said matter, however, it is true that deed of partnership was not produced and, therefore, Hon'ble the Apex Court relied upon other circumstantial evidence. Hon'ble the Apex Court also took into consideration section 14 of the Partnership Act regarding the property of the firm. Hon'ble the Apex Court observed that in absence of partnership deed, there was no direct evidence, it was difficult for the Court to arrive at a finding that the tenancy rights were originally brought in stock of the firm. However, it was observed that in the case of that nature, the conduct of the parties assume significance. In para. 27 in the decision, it was specifically observed that the very fact that the royalty received in respect of the said premises was being deposited in the partnership account is a clear pointer to show that the same was the property of the partnership. In para. 29 in the decision, it was observed that said case was not a case where a landlord had brought any suit for eviction of the tenant on the ground that the tenant had wrongfully assigned his right, title and interest in the tenanted premises in contravention of section 15 of the Bombay Rent Act and thus was liable for eviction. It was specifically observed that the Court was concerned with a partnership. Ultimately, in para. 35 in the decision, Hon'ble the Apex Court observed as under :-

"35. We, however, in this case are of the opinion that as the usufruct of his leasehold was to be deposited in the partnership account, the same formed the part of the assets of the partnership."

Ultimately, appeal was dismissed.

18. In the instant case, almost identical is the situation. In the instant case, the dispute regarding the tenancy rights is between the partners and not between a landlord and a tenant. In the instant case, there is availability of partnership deed itself and considering the initial partnership deed of the firm M/s. Sultansingh Mohansingh dated 24/11/1968, both Mohansingh Sultansingh [father of the respondent] and Chandansingh [father of the claimants] entered into a partnership agreement to form the partnership firm and in it, it has been specifically mentioned that the firm which was carrying on business in the shop in Ahmedabad Maskati Market [the subject premises] shall be continued in the name of M/s. Sultansingh Mohansingh. After the death of one of the partners, Chandansingh, his widow Chandrikaben was inducted as partner and in the partnership deed dated 4/7/1974 it has been specifically stated that the place of business of the firm which was in the shop in Maskati Market, Ahmedabad, shall be continued to be the place of business. In the instant case, it is further pertinent to note that the landlord [Maskati Charitable Trust] accepted Sultansingh Mohansingh [the firm] as tenant and a rent note to that effect was executed. In the award passed by the Ld. Arbitrator, it has been discussed in detail this aspect of the matter and it has been clearly observed that the rent of the subject premises was paid from the account of the partnership firm and the rent receipts were issued in the name of partnership firm M/s. Sultansingh Mohansingh. It has been further clearly observed that the amount regarding electricity bills, telephone bills, etc., was paid out of the fund of the partnership firm and the receipts were examined by the Arbitrator. It has been further observed that on behalf of firm, a request was made in writing to the landlord to permit the firm to undertake necessary reparation in the premises and the landlord had given such permission to the firm. It is further pertinent to note that in the ground floor portion of the subject premises, there was a sub-tenant, who by executing a deed of surrender of possession dated 28/8/1998 surrendered the possession of the ground floor of the subject premises to the partnership firm M/s. Sultansingh Mohansingh and the partnership firm in turn, surrendered the possession of the ground floor portion of the subject premises to its original owner and thereafter rent came to be reduced by the landlord. Initially when the partnership firm was occupying both the floors, namely the first floor and the ground floor, the monthly rent was Rs.684/-, but after the ground floor portion was surrendered by the sub-tenant to the partnership firm and in turn, by the partnership firm to the landlord, monthly rent came to be reduced to Rs.228/-.

18.1. It is further pertinent to note that subject premises was used by other six concerns of either the claimants or of the respondent. The details are incorporated in para. 4 in the award passed by the Ld. Arbitrator. On the aforesaid basis, it has been observed in para. 18 in the award, more particularly on internal page 30, that the different firms started by the partners carried on business in the subject premises and paid rent to the firm Sultansingh Mohansingh. While arriving at such conclusion, the Ld. Arbitrator relied upon copies of the accounts placed on record. It is pertinent to note that before the City Court, about the books of accounts, on behalf of the respondent herein, it has been stated that there was wide difference in the total collection of the rent and when the provisions of the Standard Rent Act were prevailing in the State, there was no explanation on the part of the claimants as to why this huge difference in the amount of the rent received by the partnership firm. Perusing para. 27 in the impugned judgment and order, it further transpires that on behalf of the respondent herein, it was submitted that thus there was an attempt on the part of the claimants to mislead the Court and the relevant vouchers and entries in the ledger are not produced and, therefore, the books of accounts, etc., are unreliable. However, in the impugned judgment and order, the City Court did not deal with this issue as to whether the claimants had concocted evidence or not. It is pertinent to note that perusing the impugned award as a whole, nothing transpires that the respondent had raised any doubt about the entries in the books of accounts or about any document produced by the claimants. It further transpires that more or less, both the sides admitted the documents and materials produced by the opposite side. It is significant to note that what is material is not what was the rent paid by each concern to the firm on account of user of the subject premises, but the important aspect is that usufruct, namely the income received from the respective concern towards the user of the subject premises, was deposited in the account of the firm. As observed by Hon'nle the Apex Court in the case of Shreedhar Govind Kamerkar v/s. Yesahwant Govind Kamerkar [supra], royalty which came to be earned and received in respect of the demised premises was being deposited in the partnership account and, therefore, it was observed that, that was a clear pointer to show that the same was the property of the firm. Almost identical is the situation in the instant case. In the instant case also the usufruct of the leasehold premises i.e. subject premises was deposited in the partnership account and the same formed the part of the assets of the partnership. Thus, in the instant case, not only there is the partnership deed produced before the Ld. Arbitrator, but there is the availability of rent note and other circumstantial evidence discussed above, which leads to believe that the tenancy rights were of the partnership firm.

19. Mr. Shah, Ld. Advocate for the respondent submitted that if at all Mohansingh Sultansingh had brought the tenancy rights into the stock of the firm, then in the partnership deed itself that fact would have been clearly mentioned, but in the partnership deed, this fact is not mentioned and, therefore, it cannot be presumed that the tenancy rights formed part of the assets of the firm. It is true that in the partnership deed it has not been specifically mentioned that the tenancy rights were brought by Mohansingh into the stock of the firm. However, at the same time, it has not been specifically stated in the partnership deed that Mohansingh, one of the partners, retained his tenancy rights of the subject premises with him. However, over and above the partnership deed, as stated above, in the instant matter, there are other evidence like rent note and other circumstantial evidence discussed above and in the award Ld Arbitrator has considered the cumulative effect of all the evidence.

20. Mr. Shah, Ld. Advocate for the respondent relied upon a decision rendered in the case of ARM GROUP ENTERPRISES LTD. v/s. WALDORF RESTAURANT reported in [2003] 6 S.C.C. 423. In the said matter, there was a dispute between landlord and tenant and the question was of subletting. The issue before Hon'ble the Apex Court was as to whether mere carrying on a partnership business in the leased premises belonging to one of the partners is enough to pass on the interest in the leased premises to the partnership business. It was held that in the absence of an agreement to the contrary, property exclusively belonging to a person, on his entering into partnership with others, does not become a property of the partnership merely because it is used for the business of the firm. It is pertinent to note that in the said matter, the dispute was between landlord and tenant and not between the partners inter-se. There cannot be any dispute that mere user itself of the premises for partnership business is not sufficient to come to the conclusion that the tenancy rights in the premises belong to the firm. Suffice it to say that in the instant case, over and above the evidence regarding user of the premises for the business of the firm, there is other relevant evidence as discussed in detail above. Almost identical was the situation in the case of Waman Shriniwas Kini v/s. Ratilal Bhagwandas & Co., reported in AIR 1959 S.C. 689. There was also a dispute between the landlord and tenant and question was about subletting. In the case of Vinaykishore Punamchand Mundhada v/s. Shri Bhumi Kalpataru reported in [2010] 9 S.C.C. 129 relied upon on behalf of the respondent, again the dispute was between landlord and tenant about subletting. It was held that sub-tenancy or subletting comes into existence when tenant voluntarily surrenders possession of tenanted premises wholly or in part and puts another person in exclusive possession thereof without knowledge of the landlord. Needless to say that in the facts and circumstances of the instant matter, the cases relied upon by the respondent do not help the respondent.

21. Mr. Shah, Ld. Advocate for the respondent relied upon a case of Arjun Kanoji Tankar v/s. Santaram Kanoji Tankar reported in [1969] 3 S.C.C. 555. Hon'ble the Apex Court elaborately discussing the provisions contained in section 14 of the Partnership Act, observed that under section 14, property belonging to a person, in the absence of an agreement to the contrary, does not on the person entering into a partnership with others, become the property of the partnership merely because it is used for the business of the firm. It will become property of the firm only if it carries agreement either express or implied that the property was, under the agreement of the partnership, to be treated as the property of the partnership. There cannot be any dispute regarding the principles established by Hon'ble the Apex Court in this case in the background of the facts and circumstances of said case. However, in the instant case, as stated above, though in the partnership deed it has not been specifically stated that Mohansingh brought the tenancy rights into the stock of the firm, but it is also not specifically stated that Mohansingh retained his rights in the premises. In the instant judgment, detailed discussion regarding the conduct of the partners has been made hereinabove and the other relevant evidence considered by the Ld. Arbitrator has been discussed. The cumulative effect of the various evidence, coupled with the rent note so also the partnership deed clearly suggest that the conclusion arrived at by the Ld. Arbitrator cannot be said to be either perverse or contrary to the evidence on record. It is further pertinent to note that the said conclusion arrived at by the Ld. Arbitrator is to be considered in the light of the provision contained in section 34 of the Act, as the proceedings before the City Court was not an appeal over the award of the Ld. Arbitrator. In the aforesaid background, it cannot be said that the reasonings assigned by the Ld. Arbitrator and the ultimate conclusion arrived at in the award is hit by any of the clauses of section 34 of the Act.

22. Mr. Shah, Ld. Advocate for the respondent vehemently submitted that the Ld. Arbitrator ignored a very material aspect of the matter that, at the time when the earlier partnership firm, namely M/s. Sultansingh Basantilal came to be dissolved in the year 1968-69, at that time a dissolution deed was executed over and above a writing in Hindi language, whereby the subject premises, at the time of dissolution of said firm, came to the share of Mohansingh Sultansingh and Mohansingh paid Rs.41,000/- to the said partnership firm. That in said dissolution deed, one of the signatories was father of the claimants, namely Chandansingh Sultansingh, who happened to be one of the partners in said dissolved firm. It is further submitted that in view of the clear recitals made in the documents, the award passed by the Ld. Arbitrator treating the tenancy rights in the subject premises of the partnership firm M/s. Sultansingh Mohansingh is contrary to law, more particularly sections 91 and 92 of the Evidence Act. It is, therefore, submitted that the award on this account alone deserved to be set aside under section 34 of the Act and the City Court rightly did so.

23. At the outset, perusing the award passed by the Ld. Arbitrator, there does not appear that the Ld. Arbitrator totally ignored the evidence in the form of the dissolution deed of the earlier partnership firm, namely, Sultansingh Basantilal as well as a separate writing executed by the partners of said dissolved firm including Mohansingh Sultansingh and Chandansingh Sultansingh. On the contrary, it clearly transpires that the Ld. Arbitrator, in the award, dealt with this aspect of the matter at great detail. The Ld. Arbitrator observed in the award that the principal contention raised by the respondent herein before him was based on these two documents. In para. 18 in the award, the Ld. Arbitrator discussed and dealt with these two documents, namely dissolution deed dated 26/12/1969 and the writing dated 15/10/1968. The relevant contents of both these documents have been reproduced in the award and it has been observed that the tenancy rights in the subject premises and the godown as well as office situated at Sikandarabad were valued at Rs.41,000/-, which amount was credited in the books of accounts by conferring rights over the said properties to Mohansingh Sultansingh. It was observed that the dissolution deed as well as the writing were almost contemporaneous documents that new partnership in the name and style of Sultansingh Mohansingh commenced with partnership deed dated 24/11/1968, which specifically recites about the place of business of subject firm to be the subject premises. The Ld. Arbitrator in para. 18 in the award, then took into consideration the relevant factors, namely the rent note in respect of the subject premises executed by the firm in the name and style of Sultansingh Mohansingh and the landlord treated the partnership firm as its tenant and the facts regarding payment of monthly rent having been made from the account of the firm. The Ld. Arbitrator also took into consideration the fact that the sub-tenant, who occupied the ground floor portion of the subject premises by executing deed of surrender of possession, surrendered the possession of the ground floor portion to the partnership firm and the partnership firm in turn surrendered the said ground floor portion to the landlord. It has been further observed that consequently the monthly rent came to be reduced. It was also observed that the different firms started by the partners, as particularized in the claim statement, carried on business in the subject premises and paid rent to the partnership firm Sultansingh Mohansingh. Since in this judgment, this aspect of the matter has been discussed and dealt with, I need not reproduce the entire discussion made above at this place, but suffice it to say that if at all the respondent had retained his tenancy rights in the subject premises at the time of incorporation of the partnership firm Sultansingh Mohansingh, then there was no reason for executing a rent note, whereby the landlord recognized the partnership firm as its tenant. It is further pertinent to note that if at all the respondent had retained the tenancy rights with him, there was no reason for the said tenant to surrender possession of the ground floor portion of the subject premises to the firm, but the same would have been surrendered in favour of the respondent. If at all the respondent had retained the tenancy rights with him, then there was no reason to credit the amount of rent received from different firms in the account of the partnership firm M/s. Sultansingh Mohansingh. Ultimately, in para. 18 in the award, the Ld. Arbitrator, observed that, "from the aforesaid contemporaneous documents, it would appear that Shri Mohansingh Sultansingh might have brought in said properties once-again in the assets of the firm of Sultansingh Mohansingh either for consideration or by way of relinquishment of his rights." As stated above, this observation made by the Ld. Arbitrator, has been criticized by the City Court in the impugned judgment and order, but at the same time, considering the issues framed by the Ld. Arbitrator and the findings to such issues given by the Ld. Arbitrator, it is clear that the issue no. 1 was to the effect as to whether the claimants prove that the subject premises is rented to Sultansingh Mohansingh, a partnership firm by its landlord? The findings are given in para. 20 in the award and the issue no. 1 came to be replied in the affirmative. Again considering the issue no. 4 framed by the Ld. Arbitrator, it was to the effect that if it is proved that the premises was rented to Mohansingh Sultansingh individually, then whether deceased Mohansingh Sultansingh waived/ relinquished/ surrendered/ forfeited either expressly or impliedly his tenancy rights to the partnership viz. Sultansingh Mohansingh? The findings arrived at for the issue no. 4 by the Ld. Arbitrator in para. 20 in the award is required to be considered and the said issue no. 4 was replied to the effect that this issue does not arise, but, if it arises, the finding would be that Shri Mohansingh Sultansingh Bordia relinquished tenancy rights in the subject premises to the partnership firm Sultansingh Mohansingh. In this context, considering the discussion made in para. 19 in the award, it clearly transpires that the Ld. Arbitrator took into consideration all the events and the conduct of the parties as discussed in para. 18 in the award. The Ld. Arbitrator also took into consideration the fact emerged from the rent note itself together with the conduct of the parties as well as the other aspects regarding the payment of rent, payment of municipal taxes, surrender of possession of part of the subject premises by the sub-tenant to the partnership firm, reduction in the monthly rent, payment of rent to the firm by the different firms started by the partners which carried on their business in the subject premises, etc., as discussed in detail above in this judgment. Ultimately, in para. 19 the Ld. Arbitrator observed that, "The transfer of interest in the tenancy rights of the subject premises by virtue of deed of dissolution in the year 1968 by the three partners of the firm of Sultansingh Basantilal in favour of late Shri Mohansingh Sultansingh appears to be an intermittent step towards formation of the new partnership in the name of Sultansingh Mohansingh which was contemporaneous in point of time. Late Shri Mohansingh clearly appears to have brought in the property in the form of tenancy rights of subject premises as the asset of the firm of Sultansingh Mohansingh formed during 1968-69 itself. Alternatively, even if in reality the tenancy rights were transferred to late Shri Moahnsingh Sultansingh, he relinquished the same in favour of the firm of Sultansingh Mohansingh. It has to be kept in mind that the firm Sultansingh Mohansingh has been the tenant of subject premises qua the landlord. Viewed the facts in any manner, they give out a picture that the tenancy rights of the subject premises belonged to the firm of Sultansingh Mohansingh."

24. In the above view of the matter, it cannot be said that the Ld. Arbitrator ignored the vital documents. It further transpires that the Ld. Arbitrator discussed and dealt with such evidence in detail in the award. When such is the situation, it cannot be said that the findings arrived at by the Ld. Arbitrator are based on mere assumptions and presumptions. It is further pertinent to note that the partnership firm was incorporated in the year 1968-69 and as per the award, the partnership firm was declared to have stood dissolved with effect from 17/8/2006. Thus, the partnership firm continued its business in the subject premises practically for the period of 38 years. Over and above the time factor, there was sufficient material on record, which came to be examined and appreciated by the Ld. Arbitrator while arriving at the conclusion that the tenancy rights in the subject premises belonged to the partnership firm. It is further pertinent to note that in para. 21 in the award, the Ld. Arbitrator observed that ordinarily any matter concerning dissolution of partnership firm and accounts, some preliminary order is required to be passed and upon finalization of the accounts, distribution of the assets and/or its proceeds takes place. It has been clearly observed that, "In the present case, the parties and their learned advocates expressed that in case the tenancy rights of the subject premises are held to be the asset of the firm, the same can be divided by metes and bounds by partition which is permitted under the rent note and the landlord would have to give effect to such partition between the partners. Once again, it has been fairly conceded that the claimants would jointly take half share [40% + 10%] and respondent would also take half share [50%]."

24.1. Thus, examining all the relevant materials on record and the submissions advanced on behalf of both the sides, the award came to be passed by the Ld. Arbitrator. It is, therefore, clear that the important contentions raised by the respondent before the Ld. Arbitrator have been aptly and sufficiently dealt with in the award. Under such circumstances, it cannot be said that the important evidence was ignored by the Ld. Arbitrator.

25. In Bharat Coking Coal Ltd. v/s. Annapurna Construction, reported in [2003] 8 S.C.C. Page 154, Hon'ble the Apex Court in no uncertain term held that the Arbitrator cannot act arbitrarily, irrationally, capriciously or independent of the contract. It was further opined :-

"There lies a clear distinction between an error within the jurisdiction and error in excess of jurisdiction. Thus, the role of the arbitrator is to arbitrate within the terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled beyond the contract, he would be acting without jurisdiction, whereas if he has remained inside the parameter of the contract, his award cannot be questioned on the ground that it contains an error apparent on the face of the records."

26. In the above view of the matter, in the award the Ld. Arbitrator took into consideration the said dissolution deed as well as the writing mainly relied upon by the respondent and considered the effect of said evidence in light of other circumstances and evidence elaborately discussed in the award and appreciating the entire evidence on record, the Ld. Arbitrator ultimately came to the conclusion that viewing the facts in any manner, they give out a picture that the tenancy rights of the subject premises belonged to the firm of Sultansingh Mohansingh. As stated above, nothing transpires that the Ld. Arbitrator exceeded his jurisdiction or authority. The Ld. Arbitrator remained inside the parameter of the contract. Under such circumstances, it cannot be said that the award is contrary to substantive provisions of law or of the Act or against the terms of the contract or patently illegal or against the fundamental policy of Indian Law or is contrary to the justice or morality or the award is so unfair and unreasonable that it shocks the conscience of the Court or that any error is committed by the Ld. Arbitrator. Ld. Judge of the City Civil Court, therefore, erred in interfering with the award under section 34 of the Act.

27. In the result, the impugned judgment and order passed by the Ld. Judge, City Civil Court, Ahmedabad deserve to be set aside and the award passed by the Ld. Arbitrator deserves to be confirmed and upheld. The appeal, therefore, merits acceptance.

28. For the foregoing reasons, the appeal is allowed and the impugned judgment and order rendered by the Ld. Judge, City Civil Court No. 10, Ahmedabad on 14/8/2008 in Civil Misc. Application No. 63/2008 are set aside. Resultantly, the award dated 2/12/2007 passed by the Ld. Arbitrator is confirmed and upheld. There shall be no order as to costs.

In view of the order passed in the First Appeal, all the pending civil applications shall not survive and stand disposed of accordingly.


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