JAGJEET SINGH LYALLPURI (DEAD) THROUGH LRS. & ORS. versus M/S UNITOP APARTMENTS & BUILDERS LTD.

Citation: [2019] 14 S.C.R. 433 · Decided: 03-12-2019 · Supreme Court of India · Bench: R. BANUMATHI · Disposal: Disposed off

Judgment (excerpt)

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JAGJEET SINGH LYALLPURI (DEAD)
THROUGH LRS. & ORS.
v.
M/S UNITOP APARTMENTS & BUILDERS LTD.
(Civil Appeal No. 692 of 2016)
DECEMBER 03, 2019
[R. BANUMATHI, A.S. BOPANNA AND
HRISHIKESH ROY, JJ.]
Arbitration and Conciliation Act, 1996 :
ss. 19 and 34(2) – Agreement between appellants and
respondent-Company – For joint-venture for construction of
residential-cum-commercial complex – On the land owned by the
appellants – Construction not completed by the Company within
the time stipulated in the agreement – Compromise between the parties
– New management of the Company filed application u/s. 9 of the
Act seeking to restrain the appellants from damaging or demolishing
the construction – Company also sought appointment of Arbitrator
– The Arbitrator, by his Award rejected the claim as well as the
counter-claim of the parties – The Award was affirmed in the appeal
u/s. 37 – High Court remanded the matter to the Arbitrator on the
ground that parties were not granted appropriate opportunity to
tender evidence and that the Arbitrator had not considered the
question as to extent of construction on the land and the amount of
expenditure thereon – Appeal to Supreme Court – Held : When the
challenge to arbitral award is on the ground of procedural
irregularity, it would fall u/s. 34(2)(a)(iii) – As per s.19, the rules of
procedure to be followed by the Arbitrator is flexible and can be as
agreed upon by the parties – In the present case, procedure for the
proceedings was as agreed upon by the parties and no objection
thereto was raised – It is evident from the Award that the Arbitrator
has adverted to the question of extent of construction and the
quantum of expenditure thereon –The challenge to the award does
not fall under any of the clauses of s.34 – However, in the peculiar
facts of the case, in the interest of justice, in exercise of power u/
Art. 142 of the Constitution, landowner is directed to pay a sum of
Rs. 45 lacs to the Company whereupon they would be entitled to
assume possession of the subject land.
 [2019] 14 S.C.R. 433
433
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SUPREME COURT REPORTS
[2019] 14 S.C.R.
Disposing of the appeal, the Court
HELD: 1.1 When a challenge is raised on the ground that
the appropriate procedure was not followed and there was denial
of opportunity, it would at best fall under Section 34 (2) (a) (iii) of
Arbitration and Conciliation Act, 1996. [Para 12][443-B-C]
1.2 Section 19 of the  1996 Act provides that the Arbitral
Tribunal is not bound by the Code of Civil Procedure or the
Evidence Act.  Further, it provides that the parties are free to
agree on the procedure to be followed by the Arbitral Tribunal.
The rules of procedure to be followed by an Arbitral Tribunal is
flexible and can be agreed upon by the parties as provided under
Section 19 of the 1996 Act. [Para 12 and 11][442-F; 443-H]
1.3 In the present case, in the proceedings dated 28.11.2009
(Annexure P-15) before the Arbitrator, the procedure to be
followed has been discussed and recorded. That apart by the very
proceedings dated 28.11.2009 the points on which arguments
would be addressed were also treated as the issues for
consideration and has been formulated and recorded in the order
sheet. From a perusal of the proceedings dated 28.11.2009 it
would be clear that both contentions raised by the counsel for
the respondent and which were accepted by the Single Judge of
the High Court to ultimately remand the matter, would not be
justified.  Firstly, in the presence of the parties and their counsel,
it had been recorded that they do not wish to cross-examine any
of the witnesses whose affidavits have been filed by the parties
concerned and one of the witness who was present was discharged
without being cross examined and no grievance was made either
by the parties or their counsel who were present. It is in that
view, the evidence was taken as closed on 28.11.2009 and the
issues for consideration was settled for arguments on the same
day. In that circumstance having consented to the said procedure,
it would not be open for the respondent to approbate and
reprobate so as to raise a different contention at this point. Having
accepted the said procedure, the respondent is estopped from
raising such contention before the Single Judge that the arbitrator
misconducted himself by not permitting the parties to cross-
examine the witness and also that the Arbitrator being more than
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70 years of age and suffering from knee prob

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