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IN THE HIGH COURT OF DELHI AT NEW DELHI
Navin Chawla, J.
Mrs. Vinnu Goel – Appellant
Versus
Mr Satish Goel & Ors. – Respondents
CS(OS) 371 of 2017 & I.As. 9259 of 2017, 9261 of 2017, 9262 of 2017, 9263 of 2017, 13079 of 2017, 13943 of 2018
Decided On : 08-08-2023
The court referred the parties to arbitration in accordance with the terms of a Memorandum of Understanding (MoU) that contained an arbitration agreement. The court found that the plaintiff, who was a signatory to the MoU, was bound by the arbitration agreement and that the dispute fell within the scope of the agreement. The court rejected the plaintiff's arguments that the MoU was not properly stamped or registered, that the claims were barred by limitation, and that one of the defendants was not a signatory to the MoU.
Fact of the Case:
The plaintiff filed a suit challenging the validity of a Memorandum of Understanding (MoU) that was executed between the defendant nos.1 and 3. The MoU purported to divide the assets and properties of the family members, including the plaintiff. The defendant nos.3 to 6 filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 (the Act), seeking a reference of the parties to arbitration in accordance with the arbitration agreement contained in the MoU.
Finding of the Court:
The court found that the plaintiff was a signatory to the MoU and was, therefore, bound by the arbitration agreement contained therein. The court also found that the dispute raised by the plaintiff in the suit was prima facie covered within the ambit and scope of the arbitration agreement. The court rejected the plaintiff's arguments that the MoU was not properly stamped or registered, that the claims were barred by limitation, and that one of the defendants was not a signatory to the MoU.
Issues: 1. Whether the plaintiff was bound by the arbitration agreement contained in the MoU? 2. Whether the dispute raised by the plaintiff in the suit was covered within the ambit and scope of the arbitration agreement? 3. Whether the MoU was properly stamped and registered? 4. Whether the claims were barred by limitation? 5. Whether one of the defendants was a signatory to the MoU?
Ratio Decidendi: 1. The court found that the plaintiff was a signatory to the MoU and was, therefore, bound by the arbitration agreement contained therein. The court relied on the principles laid down in Vidya Drolia & Ors. V. Durga Trading Corporation, (2021) 2 SCC 1, which held that parties are bound by an arbitration agreement even if they claim to have not read or understood the terms of the agreement. 2. The court found that the dispute raised by the plaintiff in the suit was prima facie covered within the ambit and scope of the arbitration agreement. The court held that the plaintiff's challenge to the validity of the MoU was a matter that should be decided by the arbitral tribunal. 3. The court rejected the plaintiff's argument that the MoU was not properly stamped or registered. The court held that the MoU bore the certificate of the Collectors of Stamp determining the stamp and the penalty payable on the MoU and certifying that the said amount stands paid thereon. The court also held that the arbitration agreement was severable from the main Agreement and could be referred to arbitration even if the main Agreement was not registered. 4. The court rejected the plaintiff's argument that the claims were barred by limitation. The court held that the application under Section 8 of the Act was filed within the time limit prescribed by the Act and that the issue of limitation was a matter that should be decided by the arbitral tribunal. 5. The court rejected the plaintiff's argument that one of the defendants was not a signatory to the MoU. The court held that the plaintiff could not defeat the arbitration agreement by merely impleading a non-signatory as a party to the suit.
Final Decision: The court allowed the application filed by the defendant nos.3 to 6 under Section 8 of the Act and referred the parties to arbitration. The court also dismissed the plaintiff's suit and all pending applications.
JUDGMENT
I.A. 11717/2017
1. The present application has been filed by the defendant nos.3 to 6 under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act') praying that the parties to the present suit be referred to arbitration, in view of the Arbitration Agreement contained in the Memorandum of Understanding dated 12.11.2014 (in short the `MoU') executed between the parties.
AVERMENTS IN THE PLAINT:
2. The present suit has been filed by the plaintiff, who is the wife of the defendant no.1 and the mother of the defendant no.2 and defendant no. 8, claiming therein that the plaintiff along with the defendants are the joint owner of the following properties:
| S.No. | Property Name | Ownership of Mrs. Vinnu Goel |
| 1. | Flat at 803, 58, Sahyog Building, Nehru Place, New Delhi 50% | |
| 2. | Plot No. 154, Neb Valley, Neb Sarai, New Delhi | along with house constructed thereupon 25% |
| 3. | Millennium Plaza 204, Village Sukhrouli, Gurgaon 50% | |
| 4. | Essel Dhoot Projects Time Tower Flat Office, 312, Time Tower, MG road, Gurgaon | 25% |
| 5. | Land and Building at 9, Chanchini Colony, Dhaiya, Dhanbad | 25.25% |
| 6. | Goel Farms, Village Harchandpur, Nunaira, Gurgaon | 33% (approx) |
3. In paragraph 2 of the plaint, the plaintiff sets out the share of the defendants, whosoever is a joint owner with her, in each of the above properties.
4. The plaintiff further states that she owns the following properties in her individual capacity:
i) Vipul Ltd (Sohna) NPNL Land;
ii) Basera Developers, Office Premises, Dhanbad
5. She further states that with respect to the properties jointly owned by her and the other defendants, she has acquired her share individually and the same is, therefore, self-acquired in her name from her own funds and she alone has a right, title or interest in such share of the properties.
6. She further states that the defendant no.3, who is the brother of defendant no.1 and her brother-in-law, has fraudulently attempted to divide the assets, properties, jewellery and all holdings of the family without the consent of the plaintiff and the defendant no.1. She submits that while making such an attempt, the properties belonging exclusively to the plaintiff have also been sought to be divided without her consent.
7. She states that at the substratum of the fraudulent attempt of the defendant no.3 is a purported MoU dated 12.11.2014, where-under the defendant no.3 is claiming that all the defendants have agreed to give a share in their own properties to the others who are parties to the said MoU. She denies agreeing to give any of her shares in any of the properties, that are the subject matter of the present suit or those which stand exclusively in her own name, whether held alone or jointly by the plaintiff, in whole or in part, to any of the defendants.
8. She states that the fact of the MoU was not known to her and came to her attention only when sometime in the middle of May 2017, the defendant nos.1 and 2 got into an argument. It was then that she became aware for the first time that there was a Court case that had been instituted by the defendant no.3 against the defendant no.1 and that there was an alleged MoU on the basis of which all the properties of the family, including those that had been self-acquired by the plaintiff herein and are held exclusively or jointly by her, had been allegedly divided between the defendant no.1 and defendant no.3. She states that the fraudulent MoU seeks to divide the subject properties as if the defendant nos.3 to 6 were the owners thereof. She further states that she is not a party to the said MoU and has at no point in time ever consented to the division of her self-acquired properties. She states that she has not permitted any of the defendants to deal with or dispose of or partition any of the properties owned by her individually or jointly.
9. She states that she vested immense trust in all the members of her family, not just on her husband and children, but also on the defendant no. 3 and h
Court has limited jurisdiction under Section 11 of Arbitration and Conciliation Act, 1996.
The issue of non-arbitrability is required to be decided at the referral stage, and the Court has the jurisdiction to review the non-arbitrability aspects at the initial stage.
Appointment of Arbitrator - Existence of arbitration agreement - Plea of agreement being unstamped also does not prevent this court in appointing an arbitrator while exercising jurisdiction under sec....
The court ruled that allegations of fraud do not negate the enforceability of an arbitration agreement, which operates independently from the underlying contract.
The sufficiency of stamp duty payment rendered the document admissible, and the named arbitrator was disqualified, leading to the appointment of Hon’ble Shri Justice K. K. Lahoti as Arbitrator.
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