Appellant/defendant in FAO No.59/2019 entered into a Joint Venture Agreement dated 06.09.2008 regarding the property owned ............

Case Laws March 19, 2023

Appellant/defendant in FAO No.59/2019 entered into a Joint Venture Agreement dated 06.09.2008 regarding the property owned by the respondents/plaintiffs, and for the purpose of development and management of the same, exclusive control whereof was given to the appellant/defendant and pursuant to the same, the tenant was inducted in the property after the same was developed, who is appellant in connected FAO No.64/2019, through a separate Tenancy Agreement. The Joint Venture Agreement contained arbitration clause which was invoked when the suit for cancellation of the Joint Venture Agreement as well as the Tenancy Agreement was instituted by the respondents/plaintiffs and in pursuance thereof, arbitration was conducted and award dated 31.12.2018 was made in terms of TORs settled between the parties and it was held that the appellant/defendant committed breach of the Joint Venture Agreement as well as the Tenancy Agreement, therefore, the same were cancelled and the tenant was also declared as illegal occupant. Objection petitions filed by the appellant/defendant as well as the tenant were rejected and the award was made Rule of the Court. Held: Learned Arbitrator has rightly appreciated the evidence and found the appellant/defendant to be in material breach of terms of the Joint Venture Agreement by not maintaining the proper accounts of the Joint Venture including the payments received from the tenant and sharing the said income with the respondents/plaintiffs and also by not getting the accounts audited that were material terms of the Joint Venture Agreement and findings of the learned Arbitrator to that extent cannot be looked into by the Trial Court or by this Court in appeal inasmuch as it is settled law that the Courts have supervisory jurisdiction in arbitration matters and the award made therein cannot be set aside on the ground that it was erroneous or that the Arbitrator could possibly have reached some other decision. However, the tenant/appellant in connected FAO No.64/2019 though was defendant in the suit instituted by the respondents/plaintiffs was prevented from nominating the arbitrator and was otherwise not bound by the arbitration proceedings, therefore, the award to his extent is liable to be modified in terms of Section 24 read with Section 21 of the Arbitration Act, 1940. Connected Appeal No.64/2019 was accordingly allowed.