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2019 Supreme(Del) 49
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, J.
Adarsh Kumar Khera - Petitioner
Versus
Kewal Kishan Khera and Ors. - Respondents
O.M.P. 643 of 2007, CRL. M.As. 13622 of 2015, 2073 of 2017, I.A. 10911, 12188, 15856 of 2016, 1557, 1562 of 2017 & 559 of 2019
Decided On : 16-01-2019
For the Petitioners:Ms. Isha Aggarwal, Mr. Akhil Sharma and Mr. Sachin Jain, Advocates.
For the Respondents:Mr. Sanjeev Mahajan, Advocate with Mr. A.K. Vashishtha, Advocate.
Arbitration proceedings must provide parties with a fair opportunity to respond to claims, and determinations of shares and properties must be in accordance with the law.
Headnote:
Arbitration - Dispute between brothers over partnership firms - Arbitration and Conciliation Act, 1996, Section 34 - 12th May, 2007, 28th May, 2007, 8th June, 2007, 13th July, 2007
Fact of the Case:
Disputes arose between three brothers over joint business in partnership firms. An arbitration agreement was entered into, and four awards were passed by the arbitrator. The petitioner challenged the awards, alleging ad hoc proceedings and incorrect determination of shares and properties.
Finding of the Court:
The court found that the arbitrator had not conducted the proceedings in accordance with the law and had not given parties an opportunity to respond to each other's claims. The court set aside all four awards and appointed a new arbitrator to adjudicate the disputes.
Issues: Ad hoc arbitration proceedings, incorrect determination of shares and properties, lack of opportunity for parties to respond to claims.
Ratio Decidendi: Arbitration proceedings must adhere to basic principles of fairness and opportunity for parties to respond. Determination of shares and properties must be done in accordance with the law.
Final Decision: All four awards were set aside, and a new arbitrator was appointed to adjudicate the disputes.
PRATHIBA M. SINGH, J.
1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘The Act’) has been filed challenging the arbitral Awards dated 13th July, 2007, 12th May, 2007 and 28th May, 2007, which are collectively annexed as Annexure-P-2 to the petition. There is also a fourth Award dated 8th June, 2007 which was also passed by the learned Sole Arbitrator.
2. Disputes have arisen between three brothers namely; Shri Adarsh Kumar Khera, Shri Kewal Kishan Khera and Shri Mahesh Kumar Khera. All three are sons of late Shri Som Nath Khera. The three brothers were engaged in joint business in three partnership firms namely; M/s. Vijay Electricals, M/s. Vijay Sippy Electrical and M/s. Khera Brothers. The shares of the brothers vary in each of the firms. They have entered into an arbitration agreement on 28th February, 2007 which reads as under: -
“ARBITRATION AGREEMENT
This agreement made and entered into between
Smt. Kaushalya Devi w/o Late Sh. Som Nath Khera R/o B-183 Derawala Nagar, Delhi
&
Sh. Kewal Krishan Khera S/o Late Sh. Som Nath Khera R/o B-183 Derawala Nagar, Delhi
&
Sh. Adarsh Kumar Khera S/o Late Sh. Som Nath Khera R/o 4/1 Racquet Court Road, Civil Lines, Delhi
&
Sh. Mahesh Kumar Khera S/o Late Sh. Som Nath Khera R/o B-183 Derawala Nagar, Delhi on ______________ day of February, 2007 witnesses as follows:-
Whereas differences & disputes have arisen between the said parties above mentioned regarding immoveable & moveable assets of our ancestral properties & other assets of the partnership firms.
Whereas the above mentioned parties could not sattle the above disputes amilcably.
Now the parties to the dispute hereby mutually agree to appoint Sh. Bhim Sain Gupta, Chairman of Plaza Group of Industries, E-21 Netaji Subhash Marg, Daryaganj, New Delhi as on arbitrator to decide the ownership of the above said disputes according to the ratio of the Partnership Deeds duly executed from time to time & other assets as stated above.
That the parties above shall abide by the award so given by the arbitrator, which shall be final and binding on them.
That the said arbitrator shall give his award within three months of the date of this agreement, which can be extended with the mutual consent of the parties.
That all the parties agree that they would cooperate and lead evidence etc. with the arbitrator as expeditiously as possible.
Having agreed to the above by all the parties, the said parties affix their signatures to this agreement on __________ day of _________ 2007 in the presence of the following witnesses as a token of their acceptance.
WITNESSES EXECUTANTS
01. ____________ (SMT. KAUSHALYA DEVI)
02. ___________ (SH.KEWAL KRISHAN KHERA)
Sd/-
03. ____________ (SH. ADARSH KUMAR KHERA) (SH. MAHESH KHERA)”
3. The above arbitration agreement is an admitted document between the parties.
4. The named Arbitrator, Shri Bhim Sain Gupta, entered reference and passed four Awards, Award No.1 dated 12th May, 2007, Award No.2 dated 28th May, 2007, Award No.3 dated 8th June, 2007 and Award No. 4 dated 13th July, 2007. Some other documents including a draft MOU were also drawn up by the Arbitrator but the said documents are not admitted by some of the parties.
5. Ms. Isha Aggarwal appearing for the Petitioner submits that the third Award was not in the knowledge of the Petitioner at the time of filing of the present petition. She further submits that the arbitration proceedings were conducted in a completely ad hoc and haphazard manner. No hearings were held, and no evidence was led before the Arbitrator. The Arbitrator in fact did not conduct any adjudication in accordance with law. All the four Awards have been simply passed on the basis of the documents/pleadings filed by the parties. It is her case that even self acquired properties of the Petitioner which are in the name of the Petitioner/his family members have been wrongly included in the common hotchpotch. It is submitted that the shares of the parties ha
