Rebello F.I., J.@mdashParties will be described by their names as the matter involves two suits which were referred to arbitration by the order of this Court dated 13-8-1999 passed in Arbitration Petition No. 34 of 1999 in Appeal No. 173 of 1992 in Suit No. 363 of 1988 and in Appeal No. 172 of 1992 in Suit No. 721/88. By the said order passed in proceedings in Suit No. 363/88 at the instance of the respondent Chopra who is plaintiff in Suit No. 363/88 filed against Sunder Singh Anand, since deceased, who was defendant No. 1 and the petitioner herein, who was defendant No. 2 and in proceedings arising from Suit No. 721/1988 filed by Sardar Singh Anand, original plaintiff against the respondent Chopra, the Court ordered that the parties without prejudice to their rights and contentions had agreed to refer all the disputes arising between the parties in relation to Suits No. 363/1988 and 721/1988 to the sole arbitration of Mr. S.R. Shah, Senior Advocate as provided in the earlier consent terms dated 23-6-1992. The petition is filed only by Satinderpal Singh Anand.
Earlier reference in the same suits to arbitration was made in terms of the consent terms dated 23-6-1992. By the said consent terms parties in the two suits being Suit No. 363 of 1988 and Suit No. 721/1988 agreed by consent that all disputes, differences, claims, counter claims between the parties arising out of and in relation to the Suit No. 363 of 1988 and 721 of 1988 pending in the Court be referred to sole arbitration of Mr. S.R. Shah, Senior Advocate. However, it transpired that the proceedings came to an end without an Award as the time was not extended. By the order of 13-8-1999, it was clarified that the petition be treated as petition under Indian Arbitration Act, 1940 as admittedly Arbitration and Conciliation Act, 1996 is not applicable.
2. Suit No. 363 of 1988 was filed by Mr. S.B. Chopra against one Sardar Singh Anand, since deceased, and Satinderpal Singh Anand his son. In that suit, the main relief''s prayed for were that the defendants therein be ordered and decreed to vacate and hand over vacant and peaceful possession of the suit premises which were described as Flat Nos. 1 and 2 on ground floor situated at 108, Chopra House, Dr. Ambedkar Road, Bandra. Prayer Clause (b) was for damages/manse profits at the rate of Rest. 15000/- per month from 1-8-1987 to 31-1-1988 and prayer Clause (c) was for future manse profits. By prayer Clause (e) interim relief was sought which included a restraint order against defendants therein from carrying out alterations, additions, etc. to the suit premises described in Exhibit (c), to the plaint or doing any other acts of trespass or remaining upon the same or disturbing in any manner plaintiff''s possession of flat, building and other structures standing thereon or from the garden in front of Chopra House. Late Sardar Singh Anand had filed Suit No. 721 of 1988 against S.B. Chopra who is plaintiff in Suit No. 363 of 1988. The main relief in the suit was for a declaration that the plaintiff is entitled to specific performance of agreement of the property described in Exhibit A and shown in sketch plan Exhibit B to the plaint for the sum of Rest. 45 lacs, as per terms and conditions contained in the draft agreement for sale Exhibit J to the plaint and consequently relief of specific performance of that agreement. In the alternative to the said prayer, late Sardar Singh Anand in the event prayer for specific performance was not granted, prayed that a sum of Rest. 50.00 lacs be granted as shown in particulars of claim for loss and damage suffered by reason of non-performance and breach of agreement for sale as also to pay sum of rupees seventeen lakes eighty two thousand, four hundred twenty five only being the amount paid in part performance, as set out in particulars of claim with further interest at the rate of 18% p.a. on the sum of rupees sixteen lakes and ten thousand only and for declaration that the property is charged for repayment of the sum of Rest. 17,82,425/-. Interim relief''s were sought for as set out in the plaint.
Both Mr. S.B. Chopra and late Sardar Singh Anand took out motions for interim relief''s. They were disposed of by a common order dated 18-10-1991. In those proceedings a receipt was relied upon, signed by S.B. Chopra for Rest. 4,50,000/-. At that prima facie stage, contention of late Sardar Singh Anand that receipt would evidence an agreement for sale was accepted and the contention of Mr. S.B. Chopra to the contrary was rejected. For the present, further reference need not be made to those orders at this stage, as reference, if required, will be made if need be subsequently. Appeals were preferred by both the plaintiffs in their respective motions. In the appeals, both the parties agreed to refer the matter to arbitration of sole arbitrator Mr. S.R. Shah sometime on 23-6-1992. At that time, Sardar Singh Anand was alive.
3. Chopra in his plaint in Suit No. 363/88, had come with a stand that on the land there was a building with four flats. That he was in possession of Flat Nos. 3 and 4 as also Nos. 1 and 2, in the circumstances set out in the plaint and the shed and garages were also in his possession. It was also pleaded that prior to 24-7-1979 Chopra and his brother were owners of plot of land admeasuring 4644 sq.yards. By agreement of sale dated 10-11-1976 both the brothers agreed to sell to one M.K. Construction Company 3300 sq. yards which was demarcated from the rest of the property in red boundary line in the plan annexed to the agreement. A compound wall was thereafter constructed separating the two plots. Chopra was in occupation and possession of 1344 sq. yards. In the building on the Plot, Flat Nos. 1 and 2 were tenanted to one Pereira and Flat No. 4 to one P.V. Naik. The pleadings then refer to the defendant No. 2, son of Sardar Singh Anand meeting S.B. Chopra and who had persuaded him to give part of plot for development. Negotiations took place. Defendant No. 2 started investigating the title and also sought information from B.M.C. as to how much land was available. On enquiry, it was found that M.K. Construction Company had consumed excess F.S.I. on the plot of 3300 sq. yards. In the light of that, various proceedings were taken out. Relationship between parties therein is set out. It was further the case, that Sardar Singh Anand gained confidence of plaintiff Chopra and stated that he undertook responsibility and liability of vacating the tenants. It was set out that the plot was to be sub-divided and that defendant No. 2 undertook that an area of 4500 sq. yards would be given for development at the prevailing market rate. These and other terms were to be incorporated when the agreement was concluded. It is set out that in the discussions question arose as to what would be the F.S.I. available. If plaintiff failed in the proceedings, then the building that could be constructed on the said plot of land, could not be more than 700 sq.yards or thereabout. There are also pleadings that a bungalow had to be constructed for Chopra and his family members of an area of 250 sq.yards. There are some other averments which need not be adverted to. It is explained that receipt for Rest. 4,50,000/- was prepared by Satinderpal Singh who had came prepared with it and who had given it to defendant, though in fact the sum of Rest. 4,50,000/- had been paid by late Sardar Singh Anand to Mr. Naik. Plaintiff Chopra was induced to sign the receipt, as Satinderpal Singh assured him that it was necessary only for the purpose of showing that a sum of Rest. 4,50,000/- was paid through the plaintiff to the tenant and in the event ultimately the development agreement in respect of area admeasuring 450 sq. yards was not signed for any reason whatsoever then in that event the sum of Rest. 4,50,000/- could be refunded. It is also pointed out, to obtain possession from Pereira letter of authority was taken and the terms and conditions under which Pereira agreed to vacate the suit flat are set out in letter dated 24th July, 1987. In para 9 it is specifically denied that Sardar Singh was authorised to retain occupation of two flats in part performance of the agreement to remain thereon and therefore for various reliefs.
In the written statement filed by Sardar Singh Anand in Suit No. 363 of 1988, it is specifically set out that apart from flat bearing Nos. 1 and 2 they were also in use and occupation of shed. It was Sardar Singh''s case that they were in use and occupation of the flat and shed pursuant to receipt dated 11-8-1987 executed by Mr. Chopra and the letter of authority dated 24-7-1987 by Chopra to his tenant Pereira, pursuant to which they paid tenant Pereira Rest. 11.60 lacs to vacate the premises in his occupation in the building and the shed on the land as part consideration under the agreement. In so far as possession of the two flats taken from Pereira, it was contended that it was in part performance of the agreement pursuant to the receipt signed by Chopra for the amount of Rest. 11.60 lacs paid to Pereira. It was the case of Sardar Singh that possession of land admeasuring 4530 sq.ft. on the Northern side of Zigzag road along with shed was given to late Sardar Singh Anand and his son Satinderpal Singh Anand on signing of receipt dated 11-7-1987. The area of 4533 sq.ft. to be sold was demarcated by constructing small bund. It was also pleaded that the suit as filed is bad for non-joinder of causes of action as defendants were in lawful and peaceful possession not only of the flats but also of the area admeasuring 4533 sq.ft. Plaintiff Chopra knowing that still had chosen to file suit only in respect of two flats and as the suit filed was only for a part of his claim, the entire suit is bad for non joinder of parties.
4. Sardar Singh filed Suit No. 721 of 1988 against Chopra for specific performance of the contract and other reliefs as set out earlier. It was his case that Chopra had agreed to sell to late Sardar Singh land admeasuring 4533 sq.ft. as described at the rate of 1000 sq.ft. This was evidenced by the receipt issued by S.B. Chopra for the sum of Rest. 4,50,000/- as part payment of the purchase price. Part money was paid by cash and part money in cheque. That was also reflected in the agreement. Chopra authorized him to deal with tenant Pereira in terms of the agreement dated 22-6-1987 and gave full authority to Sardar Singh to pay Pereira 11.60 lacs. on his behalf and to receive vacant possession of the flats and to retain possession in part performance of the agreement to sell. Chopra also gave letter dated 24-7-1987 to Pereira requesting him to deal with Sardar Singh. It is not necessary to advert to the same. It is also set out that in part performance possession of surrounding land admeasuring 4530 sq.ft. was handed over to late Sardar Singh Anand which he asked S.B. Chopra to demarcate in terms of the sketch plan given by S.B. Chopra and attached as Exhibit B to the plaint. The suit was filed by him, on that basis. His son''s ration card was transferred to Chopra house as also telephone and electricity bills. It is the case of Sardar Singh that they were freely and exclusively occupying the flats and surrounding lands. That all the terms and conditions were agreed upon and finalized and he instructed his Advocate at Baroda to prepare a draft agreement in accordance with the agreement for the approval of the defendants which he did by his letter dated 22-12-1987. Chopra was requested to return the draft duly approved. There was no reply. On 13-1-1988, Advocates letter was addressed to Chopra to put the agreement on stamp paper and execute the same. The agreement is identified as Annexure Exhibit J to the plaint. On 21-1-1988, belatedly a reply was received to his Advocate''s letter dated 22-12-1987. In that letter Chopra set out his version. The sum and substance of the letter was that the matter was at the negotiation stage and several terms were yet to be agreed upon and problems with B.M.C. were to be resolved. A development agreement drafted by Chopra was sent to Sardar Singh Anand separately. It is the case of Sardar Singh Anand that in the said letter Chopra admitted that he had given property for development. The suit was thereafter filed as Chopra started interfering with the property. That Sardar Singh was always ready and willing to perform his part of the agreement but Chopra went back on the agreement. In paragraph 11, case of Sardar has been that in respect of the property more particularly described in Exhibit A to the plaint and shown in sketch plan Exhibit B Chopra entered into agreement for sale and development. In part payment he paid the sum of Rest. 4.5 lacs for which receipt was passed. Further sum of Rest. 11.60 lacs was paid to Pereira on behalf of S.B. Chopra and which was agreed to be appropriated towards further part payment of the purchase price. On execution of this agreement, further sum of Rest. 3,90,000/- was payable, which the late Sardar Singh Anand was ready and willing to pay. There other pleadings set out in the plaint, as filed. Chopra filed written statement and reiterated the stand taken by him in his plaint in Suit No. 363/88 that there was no concluded contract for development, as all the terms had not been finalized. Pleadings in the plaint, were referred to in terms of the contentions as set out in the suit filed by Chopra.
5. After the first consent terms and before the second order was passed on 13-8-1999 in Arbitration Petition No. 34 of 1999, taken out by Chopra, Sardar Singh Anand expired on 21-12-1995. Till date no formal steps have been taken to set aside the abatement and bring on record the L.Rs. of Sardar Singh Anand in Suit No. 363/1988. The contention advanced on that count would be dealt with subsequently. In Suit No. 721 of 1988, on the other hand, heirs of Sardar Singh have been brought on record pursuant to Chamber Summons 633 of 1996 which record would show was served on Chopra on 9-7-1996 and was allowed by order dated 19-3-1997 by this Court. Contempt petition was also taken out against S.B. Chopra being Contempt Petition No. 17 of 1998 for violating orders dated 18-11-1981. In this contempt petition, L.Rs. of Sardar Singh had taken out motion which was served on S.B. Chopra on 2-7-1998.
In the arbitration petition, which S.B. Chopra had taken out, being Petition No. 34/99, is against all legal heirs of Sardar Singh which petition was allowed by order dated 13th August, 1999. The respondent herein sought reference of the subject-matter of both the suits. The said petition was u/s 21 of the Arbitration Act, 1940 which provides that where all the parties in any suit agree that any matter in difference between them in the suit, shall be referred to arbitration, they may apply in writing for an order of reference. That is what Chopra did and Satinderpal Singh and other legal heirs of late Sardar Singh agreed to.
6. On 8-9-1999, after the arbitrator had commenced the proceedings, an interim application was moved, calling on the learned arbitrator to pass an interim Award by holding that the Suit No. 363 of 1998 stands abated under Order 22, Rule 4 as the L.Rs. of Sardar Singh had not been brought on record pursuant to his death on 21st December, 1995 and defence in Suit No. 721 of 1988 be struck of in view of violation of injunction order dated 18-10-1991. The cause title of the application before the arbitrator shows a misdescription as if the applicant had moved the High Court though, in fact, this application had been moved before the arbitrator. In the said application it also was set out that criminal proceedings had been initiated against Chopra wherein he had been convicted. In an appeal preferred, the conviction was maintained but the imprisonment was reduced till the rising of the Court in view of the old age, but the fine imposed was maintained. In para 3 of the application, it was set out that the case of Chopra that he had become aware of the death of Sardar Singh on 16-10-1998 was a false statement. Chopra filed a reply which is dated 17-9-1999. It was set out that considering the order of 13-8-1999, the legal heirs of Sardar Singh Anand who are on record had consented to the pending disputes being referred to arbitration and considering that, there can be no question of abatement of the suit. Apart from that it was contended that Satinder was already on record in the suit and as he is the son and heir of deceased Sardar Singh Anand and considering that the suit was for action in trespass, it cannot be said that the suit had abated.
7. On 21-3-2001 Chopra in his application before the learned arbitrator in so far as Suit No. 363 of 1988 is concerned prayed for amendment of the plaint in terms of the schedule. By the amendment which are additional pleadings, further reliefs were sought namely that after filing of the suit opponents/defendants had encroached on the shed and open space in front of Flat Nos. 1 and 2. The said encroachment and occupation by the opponents continued till date of the application, despite the protests of Chopra. The suit of Chopra was filed on 2-2-1988. The application was taken out on 21-3-2001. On behalf of the legal heir of Sardar Singh, reply was filed opposing the said application dated 9-4-2001. It is set out therein that Pereira had handed over possession to them and relied on the affidavit dated 27-5-1988 of Pereira which forms part of the evidence of L.R. of late Sardar Singh Anand. My attention was also invited to the pleadings in Suit No. 721 of 1988, paragraph 6, wherein it was clearly set out that they were in possession. My attention was also invited to affidavit dated 9th June, 1988 in Notice of Motion No. 944 of 1988. Attention was invited to order of a learned Judge of this Court, Sugla, J., in Notice of Motion No. 1071 of 1988 dated 11-4-1988 wherein the shed in dispute was to be kept under lock and key of the defendants i.e. late Sardar Singh Anand and were not to be used until Notice of Motion was disposed of. In another motion taken out being Notice of Motion No. 944 of 1988, by late Sardar Singh Anand, injunction was granted restraining S.B. Chopra from interfering with possession of the open land surrounding the two flats. It was specifically set out that the main application was made 13 years after the suit was filed. It was belated and different and new cause of action was sought to be pleaded. Rejoinder was filed on behalf of Chopra on 11-4-2001. It may also be mentioned that in the affidavit of 24th January, 2000 of Satinderpal Singh filed before the arbitrator, in paragraph 14, it has been set out that the claim of possession made in the affidavit-in-evidence of Chopra is beyond the scope of the suit. Parties led evidence before the Arbitral Tribunal, including documentary evidence.
8. On behalf of Satindarpal Singh and the other legal heirs of Sardar Singh, the Award is challenged amongst others on the following grounds:
(1) It is contended that the Suit No. 363 of 1988 was filed by Chopra against Sardar Singh for eviction from the two flats on the ground floor, on the cause that they were trespassers. The legal heirs of Sardar Singh were not bought on record. The contention of Chopra that the suit being an action of trespass does not abate, is devoid of merit, as the decree passed would be joint and indivisible and in the absence of all the legal heirs it would not be executable. It is also contended that there was no application for condoning the delay in taking out the application for bringing on record the legal heirs. There must be an application for setting aside abatement and condonation of delay in bringing L.Rs. on record. That has not been done and consequently that amounts to misconduct on the part of the arbitrator. It is then contended that the contention that Satindarpal Singh was already on record and as such, the estate of deceased was represented and cause of action survives, is devoid of merit as it must also be shown that Anand was the legal representative, as provided u/s 211 of the Indian Succession Act. This was not the case and consequently Satinder Pal could not have represented the estate of deceased and hence, the suit filed by Chopra abates in entirety. Though order has been passed to bring on record L.Rs. of deceased Chopra, they have not been served with the notice of being joined in the proceedings. The Award is passed only against deceased and Satinder Pal Singh. In that light of the matter, the Award passed is a nullity at law against a dead person and at least not binding on L.Rs. who were not served.
It is next contended that allowing application for amendment denotes non-application of mind by the learned arbitrator and would fall within the expression legal misconduct and must result in Award being set aside. It is then contended that though application for amendment of the pleadings was allowed, no evidence was led on that point and the evidence was restricted to possession of only two flats. This would also disclose misconduct and consequently Award is liable to be set aside on that count.
It is next contended that Chopra''s suit being Suit No. 363 of 1988, was only respect of two flats. The issues were framed in respect of two flats. The matter was referred to Court u/s 21 of the Arbitration Act, 1940. Amendment if any could not have been allowed by the arbitrator. The amendment if any had to be made before the Civil Court where the suit was pending. Considering Rules of the High Court, the learned arbitrator has passed an Award which is not in terms of reliefs as sought. He has clearly exceeded his jurisdiction and to that extent the Award is liable to be set aside.
In so far as manse profit is concerned, it is contended that Chopra retained the sum of Rest. 16.10 lacs paid to the two tenants, which receipt is acknowledged by Chopra. At no point of time, Chopra either returned the money or deposited the money in the Court. The Arbitral Tribunal itself recorded the finding that the possession of two flats by late Sardar Singh was with implied consent of S.B. Chopra. Once that be the case, manse profits could not have been granted and consequently the Award discloses an error of law apparent on the face of the record and a suit is also liable to be set aside on this ground.
In so far as relief of specific performance is concerned, it was contended on behalf of the petitioner herein that the petitioner had been able to establish that there was an agreement, land had been identified, area had been identified, all the essential requirements of the specific performance had been therefore satisfied and in these circumstances the Award is liable to be set aside as the order clearly suffers from an error apparent on the face of record.
9. On behalf of Chopra, in answer it is contended dealing with the issue of abatement that the petitioner and other legal heirs got themselves impleaded in the suit for specific performance as otherwise the said suit would have abated. At the time of reference by the Court, the legal heirs of Sardar Singh Anand were on record in arbitration petition. They were represented by Counsel and they agreed to the reference. Before the learned arbitrator also all the legal heirs were represented. The two suits had been heard together. It is therefore contended that it is not open for the petitioners herein to raise the said issue more so as the deceased was already represented by one of the heirs already on record.
In so far as amendment is concerned, it is contended that it must be borne in mind that there were two suits which were pending. In these circumstances, part reliefs could not have been granted and it was open to the arbitrator to mould the reliefs, considering material on record, which shows that the possession of the open land and the shed had not been handed over to late Sardar Singh. It was, therefore, open to the arbitrator to Award monetary compensation instead.
In so far as manse profits is concerned, there is nothing in the written submissions nor was there any serious argument at the Bar on that aspect of the matter. On the contrary, the learned Counsel left the same for decision by the Court.
It is contended on behalf of the respondents that learned arbitrator has given a clear finding that the parties were not at ad idem on the terms of the agreement. This was within the jurisdiction of the arbitrator. Once that be the case, and the arbitrator had recorded a finding of fact, this Court should not interfere with the said finding, even if another view is possible. It is further submitted that the agreement if at all is an agreement for development. An agreement for development could not have been specifically performed. If there be breach or failure to perform, at the highest, compensation in terms of money would be the answer but not a decree for specific performance. In these circumstances, it is contended that even the conclusion arrived at by the learned arbitrator cannot be sustained.
10. We may now first deal with the contention as to whether the Suit No. 363 of 1988 stands abated in view of the death of late Sardar Singh and consequent failure by Chopra to bring on record L.Rs. of late Sardar Singh. Satinderpal was also sued in his individual capacity in the suit. The learned arbitrator in so far as this contention is concerned, does not seem to have framed any issue on that count. However, there is some discussion in paragraph 12 of the Award. The learned arbitrator has taken note that Sardar Singh Anand expired on 21-12-1995 and that his son was already party to Chopra''s suit. That the legal heirs of Sardar were already brought on record on 19-3-1997 in Suit No. 721 of 1988, the suit filed by late Sardar Singh. Sardar Singh Anand expired on 21-12-1995. There is further finding that as particulars of death and heirs were not disclosed, they could not be brought on record. That he has condoned delay in bringing the heirs on record and in these circumstances, an application dated 9-9-1999 taken out on behalf of heirs of Sardar for striking of defence was rejected. In support of this contention, on behalf of the heirs of Sardar, it was contended that there was no application made by respondent for bringing on record heirs of Sardar Singh nor for condoning the delay or setting aside abatement. In answer it is contended on behalf of Chopra that on the death of Sardar Singh, Satinder and other heirs got themselves impleaded in the suit for specific performance and in the absence of such impleadment, suit filed by the sole individual, petitioners'' father would have abated. Reference is then made that in application for reference to arbitration in 1999 before this Court, where all the legal heirs of late Sardar were made parties. All of them were being represented by Counsel. All of them agreed to the reference namely that the subject-matter of the two suits be decided in arbitral proceedings. In arbitration proceedings also legal heirs were represented by Counsel.
From the Award as noted earlier, the learned arbitrator has set out that he has condoned the delay for bringing on record the L.Rs. One of the reasons is that the particulars were not given to Chopra. This is clearly contrary to the record considering the material which would clearly show that Chopra had knowledge, yet did not take steps in time to bring L.Rs. on record. The real question is whether it can be said that the proceedings before the arbitrator stood abated. In my opinion there are two distinct issues which will arise here. The first is whether the proceedings before the arbitrator stood abated, on account of death of Sardar Singh on failure to implead legal heirs in Chopra''s suit or alternately suit itself stands abated. In the first instance, reference to the arbitration was pursuant to an order passed in Arbitration Petition No. 34 of 1999 which petition was filed by Chopra. This application apart from other suits, also was in Suit No. 363 of 1988. In these proceedings by order of 13-8-1999, this Court was pleased to direct the parties to arbitration. This was subsequent to the death of Sardar Singh in December, 1995. The subject-matter was the same as set out in consent terms dated 23-6-1992. The consent terms of 23-6-1992 was in respect of both the suits namely Suit Nos. 363 of 1988 and 721 of 1988. In so far as arbitrator was concerned, therefore, he exercised jurisdiction in respect of reference made to him between Chopra on one hand and legal heirs of Sardar Anand on the other. The issue for consideration before him was the subject- matter of both the suits. The parties before him were those parties who were parties to the Arbitration Petition No. 34 of 1999. The arbitrator, in the circumstances, was bound to proceed and decide the reference to him between the parties who had agreed to arbitration and were parties to the reference. The legal heirs of Sardar Singh were parties. The application therefore, before the learned arbitrator to hold that the Suit No. 363 of 1988 stood abated or to strike out the pleadings on the ground of breach of an order, was clearly outside the scope of reference to arbitration. It was therefore, not open to the arbitrator to decide that application as it was beyond the terms of reference. The mere fact that he had condoned the delay in bringing L.Rs. on record is inconsequential as it would not be open to the arbitrator to permit parties to decide issues which had to be decided by the competent Civil Court. In so far as the arbitrator was concerned, all the parties including the L.Rs. of Sardar Singh were before him, as also the subject-matter of both the suits. Consequently in so far as arbitral proceedings are concerned, it cannot be said that the proceedings stood abated.
It is no doubt true that on behalf of legal heirs of Chopra, their learned Counsel relied on the judgment in the case of
The heirs of late Sardar however relied on the judgment in
11. We then consider the issue of amendment application. In my opinion, this can be considered after discussing the main controversy as to whether Chopra is entitled for recovery of possession or whether heirs of Satindar Pal are entitled to decree for specific performance. It may be noted that the Award of the arbitrator can be interfered with if the Award discloses misconduct on the part of the arbitrator or the Award discloses error apparent on the face of record or the Award was not subject-matter of reference and therefore, the arbitrator had no jurisdiction to decide the reference. In his Award, the learned arbitrator in issues framed, held that the legal heirs of late Sardar Singh and Satindar Pal were trespassers and have no right, title or interest whatsoever in the suit property being Flat Nos. 1 and 2 on the ground floor. The learned arbitrator also found that Sardar and his sons were not in use and occupation of the flats being Flat Nos. 1 and 2 and the vacant area in the compound. The learned arbitrator also found that the possession of two flats was not given in part performance, pursuant to the amount of Rest. 11,61,000/- paid to Pereira and or that the said amount was to be adjusted towards purchase price. The learned arbitrator in so far as suit of Sardar Singh, held that there was no valid and concluded contract between the parties and also held that Sardar Singh and his heirs are not entitled to specific performance of the contract. It is this finding and consent Award which has been the subject-matter of the challenge.
There was documentary evidence before the Arbitral Tribunal as evidenced by receipt of 11-7-1987 wherein Chopra had set out in words that he had received sum of Rest. 4,50,000 from Sardar Singh as part payment towards price of land admeasuring 4533 sq.ft. bearing city Survey No. 901, Plot No. 9, Chopra House, 108, Dr. A.B. Road, Bandra which he had sold with vacant possession to Shri Sardar Singh Anand for a sum of Rest. 45,00,000/- (Rupees Forty Five Lacs only) at the rate of Rest. 1000/- for per sq.ft. This receipt was admitted in evidence. This, by itself, would, prima facie, show that there was a written agreement to sell. Then there are other documents one being of 6-10-1986 to the B.M.C. seeking inspection of documents. There is application for development dated 12-9-1987 by Chopra where the area is shown as 4533 sq.ft. Evidence of Antony Pereira tenant, led in criminal case was also tendered. There is also no dispute and the documents/evidence to show that Pereira was paid by Sardar Singh pursuant to authority given by Chopra and that Pereira handed over possession to Sardar Singh. Sardar Singh was in occupation of the premises pursuant to the agreement, and letter of authority. Finding by the learned arbitrator therefore, that Satinder and his sons were trespassers on the land was by ignoring documentary evidence on record. This would clearly amount to misconduct on the part of arbitrator and all the findings on that count are liable to be set aside. The next aspect, however, is that even assuming that the said finding of trespass is set aside, whether it is possible to hold that the relief for specific performance ought to have been granted or can be granted. The learned arbitrator has given a finding that the parties were not at ad idem in so far as consideration and the terms concerned. Before the arbitrator there were documents. One such document is the unsigned agreement forwarded to Chopra by Counsel of late Sardar Singh and the other, the draft of agreement sent by Chopra to Advocate for Sardar Singh styled as development agreement. In order to grant specific relief, it must be proved that there was agreement to sell and that agreement was not purely an agreement for development and further that all terms had been settled. In so far as agreement to sell is concerned, the material on record would evidence firstly that the area to be sold was specified. Secondly the price was specified. This can be evidenced from the receipt and other documents. However, the correspondence exchanged between the parties will also have to be examined. By letter of 29-8-1987 addressed by Chopra to Anand, Chopra informed Sardar Singh that as he had not given further details about dealings with there tenants the authority is cancelled. By letter dated 6-10-1987 addressed to Shri Chopra it is pointed out that Chopra has gone back on his original commitments. On 3-11-1987 Chopra wrote to Sardar setting out the flats as and when vacated were to remain in his possession. It was further pointed out that there were no commitments made by Chopra as a lot of things had to be done before concrete shape could be taken to the agreement to reduce it in writing. On 22-12-1987 Advocate for Sardar Sing sent Chopra a draft agreement styled as agreement for sale and development. There is some dispute as to which is the correct document. It is not necessary to go into that aspect. On 13-1-1988 Advocate of late Sardar Anand wrote to Chopra that draft agreement had been sent and it had not been returned back and it was therefore, thought that Chopra was agreeable to all the terms and conditions of the agreement of sale and development and therefore should now execute the document. On 20-1-1988 in answer to letter of Advocate for Sardar, received by Chopra''s Advocate on 31-12-1987, informed that the matter was still at negotiation stage, various terms still had to be agreed upon before the agreement can be concluded and the permission of appropriate authority had to be obtained. The letter also says that Chopra had drafted agreement for development and the same was being forwarded to Sardar. There is another letter of 27-1-1988 addressed to Sardar about flats taken in possession by Sardar. There are police complaints. On 29-1-1988 draft of the development agreement, on behalf of Chopra, was forward to Advocate of late Sardar. There is also other correspondence which need not be reproduced. It is therefore, clear that it was agreed to sell a specific area for a particular price. There were disputes as to whether the transaction would be an agreement to sell or development agreement and other terms and conditions. It is on this basis that the arbitrator came to the finding that the parties were not at ad idem as to the nature of the contract. Once that be the case, in my opinion and considering the material, it is not possible to reappreciate the evidence and come to the different finding than that arrived at by the arbitrator in so far as decree for specific performance is concerned. The view taken is a possible view. In my opinion, therefore, it is not possible to interfere with the findings by the Arbitral Tribunal on that count. Once that be the case, relief by way of specific performance will have to be rejected.
12. That leaves us with the issue of manse profits. It has been earlier held that the possession of late Sardar was pursuant to the lawful entry on the premises with permission of Chopra. There are interim orders also of this Court protecting possession of late Sardar not only of the two flats but of the shop, garages and land. It is true that interim orders cannot be considered to be final. However, the fact remains that in the course of proceedings, Chopra himself applied for relief of possession in respect of other structure and land apart from the flats in possession of Sardar Singh. In other words, possession of Sardar Singh has been confirmed. Sardar had paid on behalf of Chopra, total sum of Rest. 16.10 lakhs being Rest. 11.60 lakhs paid to tenant Pereira and the other amount paid to tenant Naik and another sum of Rest. 5,000/- paid for legal proceedings. These amounts have not been returned by Chopra, nor for that matter has it been deposited in this Court. In other words, Chopra has been using the money. No interest has been paid by Chopra to Sardar Singh. The question therefore, is whether in these circumstances, after possession of Sardar was found to be lawful on the premises, he having parted with consideration whether he is liable to pay manse profits. Even on behalf of Chopra, their learned Advocate did not advanced any serious argument but left it to the Court. In my opinion, the possession of Sardar Singh not being that of a trespasser, as he has parted with consideration, it was not open to the arbitrator to grant relief by way of manse profits unless Chopra had first returned the moneys paid on his behalf. In the light of that, Award of the arbitrator awarding manse profits in the sum of Rest. 15,000/- and Rest. 30,000/- clearly discloses an error of law apparent on the face of record and is liable to be set aside.
13. Apart from that, it may be noted that though the arbitrator has directed refund of Rest. 16,10,000/-, the learned arbitrator has fixed interest thereon at the rate of 6% p.a. with effect from 1-8-1987 till payment. Clearly this money was parted for business consideration. The agreement no doubt does not provide for interest in the event the agreement was terminated. The question however will be whether what is reasonable compensation to be paid to Chopra. In the instant case, after the finding arrived at, no decree for specific performance can be granted and considering the current rate of interest and the moneys having remained with Chopra and the subsequent act on the part of Chopra selling the property for huge amounts, thereby showing appreciation in the value of the property and consequently profits. In my opinion, while refunding the amount of Rest. 16,100,000/- the legal heirs of Sardar Singh will have to be compensated. A sum of Rest. 15.00 lacs. was sought as compensation. There was no cross-examination on that point. However, no specific evidence was led. Interest was claimed at the rate of 18% p.a. in the suit. In these circumstances, considering that the principal amount was paid on different dates and the claim for interest and compensation, ends of justice will be met by passing an equitable order. On the sum of Rest. 16,10,000/- interest will be payable at the rate of 18% from 11-7-1987 till the filing of the suit and at the same rate from the date of filing of the suit till Award on the principal amount of Rest. 16,10,000/-.
14. That leaves us with the issue of amendment which was prayed for by the petitioner in the pleadings and reliefs can be granted. It is true that the Arbitral Tribunal could not have gone beyond the terms of the reference. The terms of the reference was two flats and not other property. In instant case, Chopra is in possession of two flats and the heirs of Sardar are in possession of two flats. In so far as possession of the shop, garage and land is concerned, there is really nothing on record to show that legal possession was handed to Sardar Singh except for the receipt. There is no other document evidencing any physical parting of possession by Chopra to late Sardar. Chopra is the owner of the property. This Court has not accepted that Sardar Singh had an agreement to sell and in these circumstances, Sardar Singh really would not be entitled to injunction to protect his possession as the owner could always exercise his right of possession. If that be the case, Chopra could not be kept out of possession, merely because there is injunction operating in his favour. That would be of no consequence while dealing with the final relief. Injunction was granted on prima facie material that there was agreement to sell between Chopra and Sardar. That has not been accepted. Once that be the case, reliefs can be moulded so that a decree in terms of the Award can be passed which is capable of execution. In my opinion, therefore, the ultimate relief of directing handing over possession need not be interfered with. Possession shall be subject to further directions that will have to be given.
15. In the light of that Award stands partly modified in the following terms:
(1) Manse profits awarded in favour of Chopra are set aside.
(2) The amount of Rest. 16,10,000/- to be paid by Chopra to legal heirs of Sardar Singh who are on record in Suit No. 721/88, with interest thereon for pre-reference period at the rate of 18% p.a. on the principal sum of Rest. 16,10,000/- from 11-7-1987 till judgment and thereafter at the rate of 18% from the date of the suit till date of the Award and thereafter, at the same rate from the date of the Award till realisation. This is both towards compensation and interest.
(3) Mr. Chopra to deposit the said amount in this Court on or before 31-8-2003. On such deposit, legal heirs of Sardar Singh including Satinder to hand over possession of the property to Chopra within two months of deposit. On possession being handed over, the amount deposited along with interest, if any, to be paid to the L.Rs. of Sardar Singh Award.
Petition stands disposed of accordingly.
16. In view of the dismissal of the petition, both the parties would be entitled to decrees in terms of the Award. At this stage, issue may be considered whether Suit No. 363 of 1988 stands abated. In the normal course, proceedings have to be taken out for bringing on record the legal heirs. In the instant case, in an application u/s 20 which was taken out in Suit No. 363 of 1988, legal heirs of Sardar were brought on record. At the stage of reference, there was no objection raised on the part of the legal heirs of Sardar that the reference could not be made in Suit No. 363/1988 on the ground that the suit filed by Chopra stood abated. That reference was in proceeding in appeal arising out of interim order. In other words, in appeal itself arising from interim orders by conduct of the parties it can be said that the legal heirs of Sardar were brought on record. If that be the case, all that was required is a formal amendment of the suit. It is true that if the legal heirs are not brought on record within the stipulated time, the suit stands abated. However, consequent to bringing on record the legal heirs of Sardar, necessary action must follow that abatement was set aside as otherwise reference could not have been made to arbitrator in respect of the subject-matter of Suit No. 363 of 1988. Even otherwise, on the facts of this case, effective decree could have been passed without bringing on record the L.Rs. of Sardar Singh Anand to meet the ends of justice.
In the light of that, there will be a decree in terms of the Award. Interest on the principal amount awarded would be at the rate of 18% from the date of decree till payment.
Both the suits stand disposed of accordingly.
17. Learned Counsel for the petitioner seeks stay of the judgment, more specifically in respect of transfer or alienation of the suit property. Execution of the decree to that effect stayed till 15th July, 2003.
The injunction which was operating during the pendency of the petition to continue till 15th July, 2003.
