A Y Kogje, J. - Rule. Learned Advocate Mr.S.P.Kotai waives service of Rule on behalf of respondent Nos.1 and 2 and learned Advocate Mr.Nayan Parekh waives service of Rule on behalf of respondent No.3.

2. This petition under Article 226 of the Constitution of India is filed with the following prayers:-

"A) Your Lordships may be pleased to issue a writ of certiorari or any other appropriate writ, order or direction declaring the impugned Arbitration Award dated 14.11.2013 as arbitrary, contrary to the principles of natural justice and illegal, as being contrary to the substantive law of India and the Arbitration and Conciliation Act, 1996 and thus beyond the authority and jurisdiction of the Arbitration Tribunal;

B) Your Lordships may be please be issue a writ of certiorari or any other appropriate writ setting aside the impugned award dated 14.11.2013;

C) Your Lordships may be pleased to issue a writ of certiorari or any other appropriate writ, order or direction declaring the impugned Agreement For Sale dated 304.2008 as illegal, as being not executed in accordance with the provisions of the Registration Act, 1908 and the Transfer of Property Act, 1882 and thus not enforceable in law;"

3. At the outset, it is recorded that by order dated 29.07.2015, prayer clause-22-C) was given up by the petitioners, therefore, restricting the relief to prayer clauses-A) and B) to declare the arbitration award as arbitrary, contrary to the principles of natural justice, illegal and contrary to the substantive law of the Arbitration and Conciliation Act, 1996. The challenge, therefore, is to the arbitration award primarily on the ground of bias as the Arbitrator himself was personally interested in the subject matter, i.e. immovable property UNDER the arbitration. The subject matter is land admeasuring 90 acres known as "Piram Island" of Taluka Ghogha, Dist. Bhavnagar.

4. Learned Senior Advocate for the petitioners submitted that the Arbitrator who passed the impugned award was Navinchandra C.Shah alias Modi and the award is passed in respect of the land mentioned hereinabove. Learned Senior Advocate for the petitioners therefore drew attention of this Court first to the Memorandum of Understanding (MOU) dated 15.02.2008 which was entered into between late Shri Siddhrajsinhji P.Raol, the petitioners are heirs and legal representatives of late Shri Siddhrajsinhji and two Private Limited Companies, viz. M/s.Ritman Concrete Pvt. Ltd. and M/s.Pacard Exports Pvt. Ltd. Both the companies were jointly and severally represented by its authorized signatory Navinchandra C.Shah alias Modi and the documents of MOU referred to the payment made towards consideration. He thereafter drew attention of this Court to the agreement to sale dated 30.04.2008 between late Shri Siddhrajsinhji and other relatives who held interest in the land and the present respondents, viz. M/s.Bengal Cynosure Development Pvt. Ltd. and M/s.BCSI Realtors Pvt. Ltd. It is submitted that the agreement to sale is a bogus agreement to sale and does not bear signature of late Shri Siddhrajsinhji He compared the documents with MOU and submitted that signature of late Shri Siddhrajsinhji is completely different and is not found on each and every page of the agreement to sale unlike MOU.

4.1 It is submitted that in the MOU, Arbitrator Shri Dipak Chakraborty was mentioned to be the sole Arbitrator whereas in the agreement to sale, in clause-10 Navinchandra C.Shah alias Modi was referred to as the sole Arbitrator. He submitted that the fact of agreement to sale being executed is highly doubtful. Over and above this, referring the name of the person who is signatory of the MOU as an Arbitrator is clear indication of the prejudged issues. It is also submitted that such document is also doubtful as though provision is made for two witnesses, but no witnesses are mentioned for execution of agreement to sale. It is therefore submitted that initiation of the arbitration itself is without jurisdiction. It is submitted that there is in fact no agreement to sale between late Shri Siddhrajsinhji or his relatives who had interest in the property in question and therefore, there was no arbitration clause which is to be invoked and ex parte arbitration award is passed. The petitioners therefore challenge such arbitration proceedings right from inception on the ground of bias and the arbitration being carried out by a person interested in the subject matter property.

4.2 It is submitted that both the second part parties in the MOU at the agreement to sale are one and the same as the address mentioned is that of Ritman Concrete Pvt. Ltd. and the respondent is one and the same.

4.3 It is submitted that entire arbitration proceeding is sham. It is submitted that the public notice issued in connection with the subject land on 15.12.2008 in Indian Express at Gujarat was issued under the name of one Dipak Chakraborty, who is named as an Arbitrator in clause-10 of the MOU. The notice issued is curiously after date of agreement to sale dated 30.04.2008.

4.4 It is also submitted that the agreement to sale, if it is to be believed then also, though the agreement to sale mentions about passing off of consideration and handing over of the possession, the said document is not stamped at all and therefore, such agreement cannot form the basis of any legal action. He referred to the judgment of the Apex Court in case of SMS Tea Estate Private Limited Vs. Chandmari Tea Company Private Limited, (2011) 14 SCC 66 [LQ/SC/2011/939] , to contend that the agreement to sale which contains arbitration clause being unstamped cannot be acted upon for the purpose of arbitration.

4.5 It is submitted that the entire proceeding would also stand vitiated as the petitioners have not been served with any notice for arbitration. The so called notice dated 28.10.2011 addressed to the petitioners has never been served upon the petitioners. The observations made by the Arbitrator regarding service of notice and the telephonic conversation is completely baseless, more particularly when Balubha Jatubha Sarvaiya, one of the signatories to the agreement to sale and was addressed with the notice invoking arbitration clause, had already expired in the year 2009. Therefore, the Arbitrator has clearly demonstrated his interest and bias by recording in the arbitration award that he has personally talked on telephone to all the parties to arbitration.

4.6 It is submitted that the date of knowledge of passing of arbitration award is 18.05.2015 when the petitioners received for the first time communication by respondent No.1 and forwarding with the same, draft deed of conveyance and arbitration award and thereafter immediately, challenged the same before this Court.

5. As against this, learned Advocate for the respondents has strongly opposed the petition on preliminary contention of alternative remedy. He drew attention of this Court to Section 34 of the Arbitration and Conciliation Act and submitted that when the appeal is provided for, the Court should not exercise jurisdiction under Article 226 of the Constitution of India. It is submitted that filing of the petition is a back door entry to the remedy which is now barred by limitation even to the alternative remedy. It is submitted that the award is dated 14.11.2013 and Section 34 of theprovides for preferring of the appeal within a period of three months, which the petitioners have grossly surpassed.

5.1 On merits, it is submitted that parties to the MOU and parties to the agreement to sale are different and independent to each other. Invoking of arbitration clause is that of agreement to sale and therefore, only clause contained in the agreement to sale can be considered to be relevant. A clause in the agreement to sale does name present Arbitrator to be the Arbitrator and therefore, was within jurisdiction to arbitrate. It is submitted that insofar as the issue whether the agreement to sale can be acted upon or not, is a disputed question of fact, not to be entered into under Article 226. It is submitted that chronology of event is such that the MOU was executed between late Shri Siddhrajsinhji on one side and two private companies on the other side. At that time, late Shri Siddhrajsinhji had pocketed substantial amount towards consideration. Thereafter, as one of the companies, viz. M/s.Pacard Exports Pvt. Ltd. withdrew its interest, M/s.Ritman Concrete Pvt. Ltd. persuaded its interest and entered into agreement to sale and at that time also, the petitioners side pocketed substantial amount. He drew attention of this Court to the contents of both these documents and submitted that though the land in question was the same, but the area which was to be transacted in both these documents, was quite different and accordingly, considerations were also different. The documents being different and independent, the respondents were entitled to invoke arbitration clause under the agreement to sale. It is submitted that the issue whether the petitioners have been served with the notice for invoking arbitration, the final order of award of arbitration is a question of fact which can be decided only on the basis of evidence.

5.2 It is submitted that in reply to the public notice, there is nothing to suggest that the petitioners have objected to existence of agreement to sale and therefore, to escape liability of the huge amount pocketed, the petitioners, as an afterthought, have taken a stand that the agreement to sale is a bogus document. It is submitted that the document-agreement to sale is a genuine document and is binding to the petitioners.

5.3 It is submitted that the petitioners cannot take up a stand that the notice invoking arbitration dated 24.10.2011 is served upon the petitioners as the same is produced by the petitioners along with the petition. It is submitted that the petitioners were aware of the ongoing arbitration, but deliberately did not participate in it and with a view to defraud the respondents, the petitioners have surreptitiously entered into a registered sale deed with regard to the same subject land in the year 2012 and after the consideration which is passed on under such sale deed is pocketed then it is clear that registration of such sale deed is sham and at a very low price which is to escape the liability of the document executed with the respondents.

5.4 It is submitted that it cannot be said that when the arbitration proceedings were initiated, ill-health of late Shri Siddhrajsinhji had prevented him from attending as the medical case papers produced before this Court reflect about mild illness and nothing serious.

5.5 It is submitted that if the agreement to sale was in fact not executed by late Shri Siddhrajsinhji at the relevant time, the same ought to have been objected by him during his life time and as the same is not done, the Court must presume that the agreement to sale is genuine document and can be acted upon. It is submitted that along with the affidavit of the respondents, documents pertaining to postal deliveries are produce which would satisfy the Court that all the names pertaining to arbitration were indeed communicated to the petitioners and the petitioners have deliberately acted as if they have not received any of such communications. He particularly drew attention of this Court to the pleadings in para-34 of the affidavit-in-sur-rejoinder, responding to the rejoinder filed by the petitioners dated 12.10.2015. He also drew attention to the particular numbers allotted by the Postal Department, drawing connection with other documents of the Postal Department on page No.383 to suggest that these documents have been delivered.

5.6 Learned Advocate for the respondents relied upon judgment of the Division Bench of the Patna High Court in case of Chunchun Jha & Ors. Vs. The State of Bihar & Ors., in Civil Writ Jurisdiction Case No.12582 of 2010 dated 25.09.2014, to substantiate his argument that even in case of bias, alternative remedy is to be resorted to. He next relied upon the judgment of the Delhi High Court in case of Bharat Heavy Electrical Limited Vs. C.N.Garg, (2000) 88 DLT 242 , to submit that challenge on the ground of bias and prejudice on the part of the Arbitrator is also covered under the provisions of Section 34 of the. He then relied upon judgment of the Apex Court in case of Nivedita Sharma Vs. Cellular Operators Assn. of India, (2011) 13 Scale 584 [LQ/SC/2011/1532] , to submit that alternative remedy has to be perceived wherever it is available. It is submitted that this judgment is delivered after the judgment of the Apex Court in case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai & Ors., (1998) 8 SCC 1 [LQ/SC/1998/1044] .

6. In rejoinder, learned Senior Advocate for the petitioners submitted that alternative remedy may not come in way of the petitioners as the petition is based on the issue of bias and interest of the Arbitrator in the property in question. He referred to the celebrated judgment of the Apex Court in case of Whirlpool Corporation (supra), to submit that the circumstances which existed in the present case would require invoking of Article 226 as the prerogative under Article 226 is not limited by any other provision of law. The award and the arbitration proceedings are wholly without jurisdiction as the same suffer with bias. He relied upon judgment of the Apex Court in case of Voestalpine Schienen Gmbh Vs. Delhi Metro Rail Corporation Limited, (2017) 4 SCC 665 [LQ/SC/2017/215] , to submit that independence and impartiality of the Arbitrator are the hallmark of any arbitration proceedings and bias is one of the fundamental principles of natural justice. Therefore, the Arbitrator appointed has to be a person independent of the parties.

7. Having considered the rival submissions and having perused documents on record, it appears that the MOU is signed between late Shri Siddhrajsinhji as first part and M/s.Ritman Concrete Pvt. Ltd. and M/s.Pacard Exports Pvt. Ltd. as second part on 15.02.2008. The said document bears signature of the parties on each and every page of the document. On behalf of the second part, Navinchandra C.Shah alias Modi has signed on each page, meaning thereby he is one of the persons who has executed the MOU. The MOU refers to the consideration and also mentions payment of part consideration. In this document, one Dipak Chakraborty is named as an Arbitrator. The second document-agreement to sale is dated 30.04.2008 purportedly between late Shri Siddhrajsinhji, representing interest of one Balubha Jatubha Sarvaiya and Rajeshwariba Shivrajsinhji Raol as first part and respondent No.1-M/s.Bengal Cynosure Development Pvt. Ltd. and respondent No.2-BCSI Realtors Pvt. Ltd. as second part. The document mentions about measurement of the properties. It also refers to full and final consideration. The consideration which is passed on and also refers to the fact of possession being handed over. However, few infirmities are found in this agreement to sale, first purported signature of late Shri Siddhrajsinhji is different from the one which is on MOU and second that though the document on last page provides for two witnesses, but there are no witnesses.

Therefore, prima facie, there is definite variation in both the signatures. Unlike the MOU, the agreement to sale does not bear signature on each and every page of the document and lastly though the agreement to sale provides for passing off of consideration and handing over of possession, the document does not bear any stamp under the provisions of the Bombay Stamp Duty Act. In this agreement, in clause-10 again, Navinchandra C.Shah alias Modi is named an Arbitrator.

8. In the judgment in case of SMS Tea Estate Private Limited (supra), the Apex Court has held as under:-

"19. Having regard to section 35 of Stamp Act, unless the stamp duty and penalty due in respect of the instrument is paid, the court cannot act upon the instrument, which means that it cannot act upon the arbitration agreement also which is part of the instrument. Section 35 of Stamp Act is distinct and different from section 49 of Registration Act in regard to an unregistered document. Section 35 of Stamp Act, does not contain a proviso like to section 49 of Registration Act enabling the instrument to be used to establish a collateral transaction.

20. xxx

21. Therefore, when a lease deed or any other instrument is relied upon as contending the arbitration agreement, the court should consider at the outset, whether an objection in that behalf is raised or not, whether the document is properly stamped. If it comes to the conclusion that it is not properly stamped, it should be impounded and dealt with in the manner specified in section 38 of Stamp Act. The court cannot act upon such a document or the arbitration clause therein. But if the deficit duty and penalty is paid in the manner set out in section 35 or section 40 of the Stamp Act, the document can be acted upon or admitted in evidence.

22. We may therefore sum up the procedure to be adopted where the arbitration clause is contained in a document which is not registered (but compulsorily registrable) and which is not duly stamped:

22.1 The court should, before admitting any document into evidence or acting upon such document, examine whether the instrument/document is duly stamped and whether it is an instrument which is compulsorily registrable.

22.2 If the document is found to be not duly stamped, Section 35 of Stamp Act bars the said document being acted upon. Consequently, even the arbitration clause therein cannot be acted upon. The court should then proceed to impound the document under section 33 of the Stamp Act and follow the procedure under section 35 and 38 of the Stamp Act.

22.3 If the document is found to be duly stamped, or if the deficit stamp duty and penalty is paid, either before the Court or before the Collector (as contemplated in section 35 or 40 of the Stamp Act), and the defect with reference to deficit stamp is cured, the court may treat the document as duly stamped.

22.4 Once the document is found to be duly stamped, the court shall proceed to consider whether the document is compulsorily registrable. If the document is found to be not compulsorily registrable, the court can act upon the arbitration agreement, without any impediment.

22.5 If the document is not registered, but is compulsorily registrable, having regard to section 16(1)(a) of the Act, the court can de-link the arbitration agreement from the main document, as an agreement independent of the other terms of the document, even if the document itself cannot in any way affect the property or cannot be received as evidence of any transaction affecting such property. The only exception is where the respondent in the application demonstrates that the arbitration agreement is also void and unenforceable, as pointed out in para 8 above. If the respondent raises any objection that the arbitration agreement was invalid, the court will consider the said objection before proceeding to appoint an arbitrator.

22.6 Where the document is compulsorily registrable, but is not registered, but the arbitration agreement is valid and separable, what is required to be borne in mind is that the Arbitrator appointed in such a matter cannot rely upon the unregistered instrument except for two purposes, that is (a) as evidence of contract in a claim for specific performance and (b) as evidence of any collateral transaction which does not require registration."

9. In view of aforesaid judgment and the infirmities found hereinabove, the Court is of the view that the document-agreement to sale cannot be considered to be the document on which petitioners can be called upon to act and accordingly the petitioners cannot be called upon to act even as per arbitration clause-10 provided in such document. The other reason for which the document cannot be believed is that the agreement to sale is executed on 30.04.2008, the public notice is issued on 15.12.2008, the same is addressed purportedly to the three signatories of the agreement to sale, but is issued by one Dipak Chakraborty, who is named as an Arbitrator in clause-10 of the MOU, the address of second part in both the documents is also the same and therefore, entire action appears to be stage-managed and it was a foregone conclusion with empty formality of arbitration. Atleast looking to the response given by the petitioners to the public notice to the two companies who are second part of the MOU, the Court can reasonably believe that the petitioners were not having any knowledge about the agreement to sale.

10. The chronology of events would suggest that the arbitration proceedings proceeded ex parte. The so called notice invoking arbitration being communication dated 28.10.2011 does not bear any other evidence to suggest that the same has been served upon the petitioners, more particularly when the third person named in such notice, viz. Balubha Jatubha Sarvaiya has expired in the year 2009. Against this, what is recorded by the Arbitrator is to the effect that the notices are not only delivered but the Arbitrator himself has telephonically communicated with all the parties to the arbitration. Such finding, on the face of it, is, if not erroneous, atleast inaccurate as Balubha Jatubha Sarvaiya had already expired in the year 2009. Such erroneous and inaccurate recording demonstrates undue haste on the part of the Arbitrator and obviously demonstrates the interest in the subject matter, thereby leading to bias.

11. At the root of it, when the arbitration proceedings are to proceed on bias as the Arbitrator admittedly has semblance of interest in the subject land, the proceedings under the cannot be permitted to stand as it would result into complete abuse of the object of the. In the ex parte impugned arbitration award dated 14.11.2013, it is recorded as under:-

"(a) In order to give assent to the request of the claimants it is directed that let there be extension of six months to the claimants to renegotiate with the respondents so that a conscionable justice can be imparted to the claimants as well as respondents to enable them to complete the transaction accordingly.

(b) It is further declared by the Tribunal that after expiry of 6(six) months the Tribunal shall hold the Award for two months so that within such grace period the entire transaction may be completed, failing which the signed copy of the Award passed by the Tribunal be delivered to the parties as per provisions of 31(5) of the Arbitration and Conciliation Act, 1996.

(c) The claimants shall send a draft deed of conveyance or conveyances for due approval of respondent No.1 within the survey map of Piram Island annexed thereto.

(d) The respondent No.1 as Constituted Attorney for respondent Nos.2 and 3 shall approve the draft deed of conveyance of conveyances accordingly.

(e) Upon receipt of approval of draft deed of conveyance /conveyances the claimants shall prepare the final conveyance /conveyances ready for execution and registration by the respondents.

(f) Simultaneously upon receipt of the balance consideration money of Rs.11,36,00,001/- (Rupees Eleven Core Thirty Six Lac and one) only the respondents shall execute and register a Deed of Conveyance or conveyances either in favour of claimants or in favour of their nominee or nominees as the case may be in respect of all the piece and parcel, of land measuring about 90 acres locally known as PIRAM ISLAND situated at Taluka Ghogha, District Bhavnagar in the State of Gujarat within 6 (six) weeks from the date of approval of the draft deed of conveyance or conveyances by the respondent No.1.

(g) The claimants or their nominee or nominees shall bear all the cost and expenses for registration of deed of conveyance or conveyances.

(h) It is further directed to the respondents that till the date the deed of conveyance or conveyances are executed and registered in favour of the claimants or their nominee or nominees the respondents shall not transfer alienate and/or create any third party interest in the said property being referred to in the agreement for sale dated 30.04.2008.

(i) It was earlier decided that the fees for arbitrator of each meeting is fixed for Rs.30,000/- and the total amount of arbitrators fee is amounted to Rs.1,50,000/- excluding other expenses and the claimants have paid 50% share of the said arbitrators fees of Rs.75,000/-. In view of the aforesaid upon receipt of this arbitral award the respondents shall pay remaining 50% share of the arbitrators fees i.e. Rs.75,000/- forthwith.

12. Considering the fact regarding the manner in which arbitration has proceeded from stage of executing agreement to sale with arbitration clause till passing of the arbitration award and nature of ex parte directions, the Court deems it fit to interfere.

13. On the point of alternative remedy, Section 34 of theprovides for appeal. However, it also stipulates grounds for appeal. Sub-section 2(a) provides for setting aside the arbitral award where party challenging it furnishes proof that the arbitration agreement is not valid under law to which the parties have subjected it, the party making the application has not been given proper notice of the appointment of Arbitrator or the arbitral proceedings or was otherwise unable to present his case or the arbitral award deals with dispute not contemplated by or not falling within the terms of the submission of arbitration or it contains decisions on matters beyond the scope of the submission to arbitration. The Arbitrator has therefore assumed the jurisdiction, which otherwise the Arbitrator could not exercise in the facts of this case.

14. From the record, even after perusing documents of the Postal Department annexed with the sur-rejoinder, the respondents are unable to establish even reasonably that the notices for invoking arbitration have been served upon the petitioners.

15. In the facts of this case, where bias and interest of the Arbitrator is writ large, on the question of alternative remedy in such gross facts, the Court is therefore inclined to exercise powers under Article 226.

16. In view of the aforesaid, the arbitration proceedings pursuant to clause-10 of the agreement to sale dated 30.04.2008 and communication dated 28.10.2011 are quashed and set aside. Consequently, the impugned arbitration award dated 14.11.2013 is also quashed and set aside. The petition is allowed in the aforesaid terms. Rule is made absolute. No order as to costs.