Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ 1. FAO(OS) NO.174/1997
rd
March 2009
Date of Decision : 3
S.N.P. PUNJ .....Appellant
Through Mr. Sanjay Jain, Sr. Adv. with
Gurkamal, Ms. Ruchi Jain, Advs.
Mr. Sumeet Bansal, Adv. for Mrs. Aarti Singh
versus
V.P. PUNJ & ORS. .....Respondents
Through Mr. Ravinder Sethi, Sr. Adv. with
Mr. Naresh Thanai, Mr. Puneet Sharma, Advs.
AND
2. FAO(OS) NO.88/1998
S.C. MATHUR ......Appellant
Through Mr. Sanjay Jain, Sr. Adv. with
Gurkamal, Ms. Ruchi Jain, Advs.
versus
VIRENDER PRAKASH PUNJ & ORS. .....Respondents
Through Mr. Ravinder Sethi, Sr. Adv. with
Mr. Naresh Thanai, Mr. Puneet Sharma, Advs.
FAO(OS) No.174/2004 Page 1 of 15
CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE VIPIN SANGHI
1. Whether the Reporters of local papers
may be allowed to see the judgment? No.
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be
reported in the Digest? Yes
% J U D G M E N T (Oral)
MUKUL MUDGAL ,J .
1. With the consent of the learned counsel for the parties, these appeals are
taken up for hearing and are being decided by this common judgment.
2. These appeals challenge the judgment of the learned Single Judge dated
th
May 1997 by which the award dated 15
th
November 1989 rendered by the
30
sole arbitrator Shri S. C. Mathur, Chartered Accountant was affirmed and made
the Rule of the Court under Section 17 of the Indian Arbitration Act, 1940 with
a slight modification, i.e., to the effect that the arbitrator was not to act as the
th
November, 1989.
arbitrator for future disputes in relation to the award dated 15
3. The facts of the case are as follows:
FAO(OS) No.174/2004 Page 2 of 15
th
August 1987 made by the same Arbitrator
a) By an earlier Award dated 5
Shri S. C. Mathur, seven sons and one married daughter of late Pandit Kanhiya
Lal Punj were awarded various companies, assets and properties. Subsequently,
disputes arose between four of such seven brothers, namely, Virender Prakash
Punj, Satya Narain Prakash Punj, Ravinder Prakash Punj and Nilinder Prakash
Punj about running of their businesses, allocation and determination of their
respective shares.
b) As the four brothers aforesaid could not arrive at any agreement on the
terms and conditions for controlling and running the businesses, a Reference
th
October 1989 admittedly came to be executed by the
Agreement dated 9
respondent No.1 V.P. Punj, the appellant, S.N.P. Punj, the respondent No.9, R.P.
Punj, and respondent No.14, N.P. Punj, referring the disputes for resolution to
the sole arbitrator Shri R. C. Mathur so that they could work independently as
far as possible and run their own affairs, as regards the ownership of the
properties. Each of the said brothers represented their respective branches of
the family.
FAO(OS) No.174/2004 Page 3 of 15
th
November 1989
c) The sole arbitrator rendered the award dated 15
distributing/allocating businesses, assets and properties amongst the parties to
the Reference Agreement.
d) The said award divided the parties to the reference and the award, into
four groups which are as follows:
Group A : Represented by Sh. V.P. Punj.
Group B : Represented by S.N.P.Punj.
Group C : Represented by R.P. Punj.
Group D : Represented by N.P. Punj.
The award referred to the above persons as the heads of their respective
families with their family members and also the companies and firms stated to
be under their control.
4. It is not in dispute that the arbitrator had been a Chartered Accountant of
the Punj Group / family for the last 30 years at the time of his appointment as
the sole Arbitrator. It is also not in dispute that this very arbitrator had, by
th
August 1987, awarded various companies, assets and properties
award dated 5
FAO(OS) No.174/2004 Page 4 of 15
between seven sons and one married daughter of late Pandit Kanhaiya Lal Punj,
out of which, four brothers figure in the present dispute. The said earlier award
was accepted by all the parties having their joint consent and as such the award
became the Rule of the Court.
5. Shri Ravinder Sethi, the learned Senior Counsel, appearing for the
respondents raised a preliminary objection as to the maintainability of the
objections as also the present appeal on the ground that the award was founded
upon a family settlement. He submits that the award clearly states that it was
arrived at by consent between the parties, and there was no challenge to the
recording of such consent, even in the objections raised before the learned
Single Judge. He further submits that the family settlement, which formed the
basis of the impunged award has been acted upon and the parties have taken
control of the properties, assets and businesses as per the award.
6. The learned counsel for the respondent in furtherance of the above plea
has relied upon the award, and in particular on the following finding in the
award:
FAO(OS) No.174/2004 Page 5 of 15
“Whereas now the parties have left it to me as to how the
running businesses are to be allotted, finally divided and shared
between the aforesaid four brothers and their heirs who are the
parties to this arbitration and to decide how the assets, liabilities
and running businesses are to be settled.
Now, I, the undersigned, have heard and examined the parties
and considered all the allegations and counter allegations and
submissions made against each other and all documents and
other evidence as produced and laid before me. In order to
resolve differences among the family members a negotiated
family settlement agreeable to all the parties have been arrived
at and contents of this negotiated settlement are as below:
To facilitate smooth transfer of, businesses and immoveable
properties I have formed four groups:
1) Shri Virendra Prakash Punj, Mrs. Brigette Punj,
Shri Rajinder Dorian Punj, Ms. Cornelia Punj.
2) Group B represents -
Shri Satya Narain Prakash Punj, Mrs. Indu Rani Punj,
Mr. Atul Prakash Punj, Mrs. Navina Punj nee
Narang,
Mr. Uday Prakash Punj and Mrs. Mangalam Punj nee
Tiwari.
3. Group C represents -
Shri Ravinder Prakash Punj, Mrs. Pushpanjali punj,
Miss Malini Punj, Ms. Nandita Punj and Mr. Gaurav
Punj.
4. Group D represents -
FAO(OS) No.174/2004 Page 6 of 15
Shri Nilinder Prakash Punj, Mrs. Gita Punj,
Shri Gautam Punj, Ms. Gauri Punj and Ms. Gayatri
Punj.
......................................”
( emphasis supplied )
7. Again, at the end of the award, the learned Arbitrator again recorded as
follows:
“ The above family settlement is hereby confirmed as an
award by me in my capacity as Arbitrator for disputes
arising among these family members. The
implementation and interpretation of this Award shall
be undertaken by me and any dispute arising therefrom
shall be referred to me by family members for
settlement and resolution. This Award and all
subsequent clarifications shall be binding on all the
members of the family in confirmation of which they
have signed hereunder.
8. It was contended that the said award was passed by an arbitrator who was
the family chartered accountant of the parties, and it was passed by joint consent
of all the parties to amicably divide shares between the four brothers. The
learned counsel for the respondent has particularly laid stress on the fact, that no
objection was taken in respect of the finding that the settlement was arrived at
with the consent of the parties. It was never contended that the consent of the
FAO(OS) No.174/2004 Page 7 of 15
parties was wrongly recorded when the appellants filed their respective
objections under Sections 30 and 33 of the Arbitration Act, 1940.
8. We asked Shri Sanjay Jain, the learned Senior Counsel appearing for the
appellant S.N.P. Punj in FAO(OS) No.174/1997 and Shri Sumeet Bansal, the
learned counsel appearing for Mrs. Aarti Singh, appellant in FAO(OS)
No.88/1998 to show us the objection to the award, to the effect that the factum
of the award being founded upon a family settlement was wrongly recorded by
the arbitrator, but they have been unable to point out any such plea before the
learned Single Judge. Consequently, by taking into account the nature of the
controversy involved, i.e., the fact that the disputes were between family
members, and the relationship that the learned Arbitrator bore with the family
due to his professional association for a long span of time, as the family
Chartered Accountant, we are satisfied that the recording of the factum of a
family settlement being reached and the same forming the basis of the award at
more than one place, indicates that the agreement was arrived at by consent of
the parties and on that basis, the award was passed. Family settlements, the
FAO(OS) No.174/2004 Page 8 of 15
Supreme Court has held in K.K. Modi vs. K.N. Modi (1998) 3 SCC 573 , should
not be lightly interfered with, especially when the same has been substantially
acted upon by the parties. Family settlements are treated differently from
commercial settlements. Such settlement generally meet with the approval of
courts. They are governed by a special equity principle where the terms are fair
and bonafide, taking into account the well-being of the family. It is the duty of
the Court to give effect to such arrangements in the letter and spirit. (See
Harishankar Singhania (2) vs. Gaur Hari Singhania (2006) 4 SCC 658 ).
The categorical assertion of Sh. Sethi, the learned Senior Counsel for the
respondents that the impugned award has been acted upon and the parties have
taken control of the assets and businesses distributed under the award has not
been controverted by the appellants.
9. The only plea, which suggests the raising of a dispute to the existence of
family settlement was raised for the first time in the present appeals and reads as
follows:
“That a perusal of the award shows that instead of
FAO(OS) No.174/2004 Page 9 of 15
rendering an arbitration award, the learned arbitrator on
his own records that he was returning “a negotiated
family settlement agreeable to all the parties.” This
observation which is contrary to the records is a gross
misconduct on the part of the learned arbitrator besides
rendering of the award as illegal and bad in law.”
10. The above is a plea which was not raised before the learned Single Judge.
This plea also does not state that the said plea was raised before the learned
Single Judge and was not dealt with by him. In this view of the matter, we are
satisfied that the aforesaid objection raised by the appellant to the award at this
scope cannot be entertained. The same appears to be an afterthought to
improve upon the objections raised to the award before the learned Single
Judge. Since objections to an arbitral award have to be raised in a time bound
manner, it is not permissible to raise fresh objections after the expiry of the
limitation period, which was before the appellate court. Reliance placed by Mr.
th
November 1989
Sanjay Jain, Senior Advocate on the communications dated 4
sent by Shri S.N.P. Punj, and the communication sent by Shri Uday N. Punj
th
November 1989 to the arbitrator wherein they sought the exclusion of
dated 8
shares held in individual names from being considered for division, are not of
FAO(OS) No.174/2004 Page 10 of 15
th
November 1989, i.e.,
much importance in our view, since the award is dated 15
after the issuance of these communications. Often, parties take a stance in such
disputes, which is given up when a settlement is arrived at.
11. Mr. Sethi, the learned counsel for the respondent has also pointed out the
fairness of the award, inasmuch as, respondent no.1 V.P. Punj, the elder brother
of the appellant had offered to exchange his share with that of the appellant
S.N.P. Punj, and such offer was not accepted by the appellant. That is the
another factor indicating the fairness of the award.
12. Shri Sumeet Bansal has stated that Mrs. Aarti Singh was not even a party
to the reference before the arbitrator and as such, the arbitrator could not have
covered her property situated at 24, Vayu Nagar, Gwalior, (MP) in arbitration
proceedings. The learned Single Judge has dealt with the aforesaid issue in the
following terms:
“10. As far as objections vide I.A. No.5658/90
(I.A.No.6723/90) are concerned, the objector is with
regard to property bearing No.24, Vayu Nagar, Gwalior
on the basis of owner thereof. Contending that, this
property has been let out to M/s Lepinus Rockwool
FAO(OS) No.174/2004 Page 11 of 15
Private Limited – a company for Rs.4,000/- per month
with effect from Ist November 1989 and that the
arbitrator misconducted himself and the arbitration
proceedings by including this property. The reply by
respondent no.1 is that the record of the arbitration
proceedings demonstrates that the aforesaid property
was brought in the hoch-poch by respondent No.5 and
declared to be available for reallocation as part of the
property of the family; that the agreement covers the
wives and children as individual and their HUF and
certain outsiders who are close family friends
connected with the investment companies, and holding
properties. Item No.18 in Schedule-II sets out House
No.24, Vayu Nagar, Gwalior and discloses the current
owner. Similarly, House No.25 also brought
simultaneously from Mr. Sushil Kumar Verma shown
in the name of Rohini Chibba, D/o respondent no.11
(R.P. Punj) is also shown as property which is the
subject of distribution. The arbitration reference
clearly mentions that the parties and abovesaid firms
have factories and immovable properties as mentioned
in Schedule-II attached; that award in Schedule-IV
demonstrates that the aforesaid property has gone to the
share of respondent No.5.
The agreement, as pointed out above at serial
No.18 in Schedule-II, includes House No.24, Vayu
Nagar, Gawlior. It is also suggested from Schedule-II
that House No.25 has also been brought simultaneously
from Sh. Sushil Kumar Verma which is shown in the
name of Rohini Chibba, D/o respondent no.11 and all
these properties are shown the subject of distribution
and reallocation. This would go to show that this
applicant is a party to the agreement and the award and,
therefore, bound by the award and the remedy is by
way of objection under Sections 30-33 of the Act and
FAO(OS) No.174/2004 Page 12 of 15
the bar of suit contained in section 32 of the Act would
apply. I.A.6723/90 is disposed of accordingly.
According to the objector, Mrs. Arti Singh,
House No.24, Vayu Nagar, Gwalior has been let out to
M/s Lepinus Rockwool Private Limited for Rs.4,000/-
per month with effect from 1
st
November 1989. It may
be appreciated that the reference agreement is dated 9
th
October 1989, i.e., prior to the letting out of the
property to M/s Lepinus Rockwool Private Limited for
Rs.4,000/- per month. A certified copy of the power of
attorney dated 12
th
August 1975 executed by Mrs. Arti
Singh, D/o Sh. S. N. P. Punj in favour of her father
respondent No.5 suggests that respondent no.5 is the
constituted general power of attorney of the objector.
Apart from anything else, even on the strength of this
general power of attorney, the objector Smt. Arti Singh
could be legally bound by her attorney so long as the
power of attorney dated 12
th
August 1975, is not
revoked/cancelled by her.”
13. The above clearly shows that the Mrs. Arti Singh had made the Power of
th
August 1975 in favour of her father, i.e., the appellant Shri
Attorney dated 12
S.N.P. Punj and in fact, the said general power of attorney has still not been
revoked/cancelled. We have also noticed that no objection is said to have been
taken to the property in the name of Ms. Rohini Chibbar, the daughter of
respondent no.9 R.P. Punj also being included in the award of the arbitrator,
though Rohini Chibbar was in the same portion as Aarti Singh. It is not
FAO(OS) No.174/2004 Page 13 of 15
uncommon that properties are purchased by the parents in the names of their
children from out of the earning derived from family business. The parties, it is
evident sought to put all such properties in the common hotchpotch for
ascertaining the respective shares and dividing the properties and assets. Even
otherwise, the appellant Aarti Singh has not been divested of her rights in the
said property, inasmuch as, the said property has been allocated to the branch of
the family which is headed by her father Sh. S.N.P. Punj. Thus, it is evident
that properties in the names of all the members of the family including the
parents of Arti Singh by virtue of General Power of Attorney given by Arti
Singh were included in the terms of the reference and therefore, we are unable to
agree with the plea of Shri Sumeet Bansal and the same cannot be accepted. In
any case, if Mrs. Aarti Singh has any grievance, the same may be against the
appellant Sh.S.N.P. Punj, her father. In this view of the matter, we are satisfied
that the preliminary objection of the learned counsel for the respondent deserves
to succeed and the objections to the award cannot be entertained.
FAO(OS) No.174/2004 Page 14 of 15
14. Accordingly, we are satisfied that the order of the learned Single Judge
does not call for interference and consequently, the appeals are dismissed.
MUKUL MUDGAL
(JUDGE)
VIPIN SANGHI
(JUDGE)
March 03, 2009
dr
FAO(OS) No.174/2004 Page 15 of 15
+ 1. FAO(OS) NO.174/1997
rd
March 2009
Date of Decision : 3
S.N.P. PUNJ .....Appellant
Through Mr. Sanjay Jain, Sr. Adv. with
Gurkamal, Ms. Ruchi Jain, Advs.
Mr. Sumeet Bansal, Adv. for Mrs. Aarti Singh
versus
V.P. PUNJ & ORS. .....Respondents
Through Mr. Ravinder Sethi, Sr. Adv. with
Mr. Naresh Thanai, Mr. Puneet Sharma, Advs.
AND
2. FAO(OS) NO.88/1998
S.C. MATHUR ......Appellant
Through Mr. Sanjay Jain, Sr. Adv. with
Gurkamal, Ms. Ruchi Jain, Advs.
versus
VIRENDER PRAKASH PUNJ & ORS. .....Respondents
Through Mr. Ravinder Sethi, Sr. Adv. with
Mr. Naresh Thanai, Mr. Puneet Sharma, Advs.
FAO(OS) No.174/2004 Page 1 of 15
CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE VIPIN SANGHI
1. Whether the Reporters of local papers
may be allowed to see the judgment? No.
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be
reported in the Digest? Yes
% J U D G M E N T (Oral)
MUKUL MUDGAL ,J .
1. With the consent of the learned counsel for the parties, these appeals are
taken up for hearing and are being decided by this common judgment.
2. These appeals challenge the judgment of the learned Single Judge dated
th
May 1997 by which the award dated 15
th
November 1989 rendered by the
30
sole arbitrator Shri S. C. Mathur, Chartered Accountant was affirmed and made
the Rule of the Court under Section 17 of the Indian Arbitration Act, 1940 with
a slight modification, i.e., to the effect that the arbitrator was not to act as the
th
November, 1989.
arbitrator for future disputes in relation to the award dated 15
3. The facts of the case are as follows:
FAO(OS) No.174/2004 Page 2 of 15
th
August 1987 made by the same Arbitrator
a) By an earlier Award dated 5
Shri S. C. Mathur, seven sons and one married daughter of late Pandit Kanhiya
Lal Punj were awarded various companies, assets and properties. Subsequently,
disputes arose between four of such seven brothers, namely, Virender Prakash
Punj, Satya Narain Prakash Punj, Ravinder Prakash Punj and Nilinder Prakash
Punj about running of their businesses, allocation and determination of their
respective shares.
b) As the four brothers aforesaid could not arrive at any agreement on the
terms and conditions for controlling and running the businesses, a Reference
th
October 1989 admittedly came to be executed by the
Agreement dated 9
respondent No.1 V.P. Punj, the appellant, S.N.P. Punj, the respondent No.9, R.P.
Punj, and respondent No.14, N.P. Punj, referring the disputes for resolution to
the sole arbitrator Shri R. C. Mathur so that they could work independently as
far as possible and run their own affairs, as regards the ownership of the
properties. Each of the said brothers represented their respective branches of
the family.
FAO(OS) No.174/2004 Page 3 of 15
th
November 1989
c) The sole arbitrator rendered the award dated 15
distributing/allocating businesses, assets and properties amongst the parties to
the Reference Agreement.
d) The said award divided the parties to the reference and the award, into
four groups which are as follows:
Group A : Represented by Sh. V.P. Punj.
Group B : Represented by S.N.P.Punj.
Group C : Represented by R.P. Punj.
Group D : Represented by N.P. Punj.
The award referred to the above persons as the heads of their respective
families with their family members and also the companies and firms stated to
be under their control.
4. It is not in dispute that the arbitrator had been a Chartered Accountant of
the Punj Group / family for the last 30 years at the time of his appointment as
the sole Arbitrator. It is also not in dispute that this very arbitrator had, by
th
August 1987, awarded various companies, assets and properties
award dated 5
FAO(OS) No.174/2004 Page 4 of 15
between seven sons and one married daughter of late Pandit Kanhaiya Lal Punj,
out of which, four brothers figure in the present dispute. The said earlier award
was accepted by all the parties having their joint consent and as such the award
became the Rule of the Court.
5. Shri Ravinder Sethi, the learned Senior Counsel, appearing for the
respondents raised a preliminary objection as to the maintainability of the
objections as also the present appeal on the ground that the award was founded
upon a family settlement. He submits that the award clearly states that it was
arrived at by consent between the parties, and there was no challenge to the
recording of such consent, even in the objections raised before the learned
Single Judge. He further submits that the family settlement, which formed the
basis of the impunged award has been acted upon and the parties have taken
control of the properties, assets and businesses as per the award.
6. The learned counsel for the respondent in furtherance of the above plea
has relied upon the award, and in particular on the following finding in the
award:
FAO(OS) No.174/2004 Page 5 of 15
“Whereas now the parties have left it to me as to how the
running businesses are to be allotted, finally divided and shared
between the aforesaid four brothers and their heirs who are the
parties to this arbitration and to decide how the assets, liabilities
and running businesses are to be settled.
Now, I, the undersigned, have heard and examined the parties
and considered all the allegations and counter allegations and
submissions made against each other and all documents and
other evidence as produced and laid before me. In order to
resolve differences among the family members a negotiated
family settlement agreeable to all the parties have been arrived
at and contents of this negotiated settlement are as below:
To facilitate smooth transfer of, businesses and immoveable
properties I have formed four groups:
1) Shri Virendra Prakash Punj, Mrs. Brigette Punj,
Shri Rajinder Dorian Punj, Ms. Cornelia Punj.
2) Group B represents -
Shri Satya Narain Prakash Punj, Mrs. Indu Rani Punj,
Mr. Atul Prakash Punj, Mrs. Navina Punj nee
Narang,
Mr. Uday Prakash Punj and Mrs. Mangalam Punj nee
Tiwari.
3. Group C represents -
Shri Ravinder Prakash Punj, Mrs. Pushpanjali punj,
Miss Malini Punj, Ms. Nandita Punj and Mr. Gaurav
Punj.
4. Group D represents -
FAO(OS) No.174/2004 Page 6 of 15
Shri Nilinder Prakash Punj, Mrs. Gita Punj,
Shri Gautam Punj, Ms. Gauri Punj and Ms. Gayatri
Punj.
......................................”
( emphasis supplied )
7. Again, at the end of the award, the learned Arbitrator again recorded as
follows:
“ The above family settlement is hereby confirmed as an
award by me in my capacity as Arbitrator for disputes
arising among these family members. The
implementation and interpretation of this Award shall
be undertaken by me and any dispute arising therefrom
shall be referred to me by family members for
settlement and resolution. This Award and all
subsequent clarifications shall be binding on all the
members of the family in confirmation of which they
have signed hereunder.
8. It was contended that the said award was passed by an arbitrator who was
the family chartered accountant of the parties, and it was passed by joint consent
of all the parties to amicably divide shares between the four brothers. The
learned counsel for the respondent has particularly laid stress on the fact, that no
objection was taken in respect of the finding that the settlement was arrived at
with the consent of the parties. It was never contended that the consent of the
FAO(OS) No.174/2004 Page 7 of 15
parties was wrongly recorded when the appellants filed their respective
objections under Sections 30 and 33 of the Arbitration Act, 1940.
8. We asked Shri Sanjay Jain, the learned Senior Counsel appearing for the
appellant S.N.P. Punj in FAO(OS) No.174/1997 and Shri Sumeet Bansal, the
learned counsel appearing for Mrs. Aarti Singh, appellant in FAO(OS)
No.88/1998 to show us the objection to the award, to the effect that the factum
of the award being founded upon a family settlement was wrongly recorded by
the arbitrator, but they have been unable to point out any such plea before the
learned Single Judge. Consequently, by taking into account the nature of the
controversy involved, i.e., the fact that the disputes were between family
members, and the relationship that the learned Arbitrator bore with the family
due to his professional association for a long span of time, as the family
Chartered Accountant, we are satisfied that the recording of the factum of a
family settlement being reached and the same forming the basis of the award at
more than one place, indicates that the agreement was arrived at by consent of
the parties and on that basis, the award was passed. Family settlements, the
FAO(OS) No.174/2004 Page 8 of 15
Supreme Court has held in K.K. Modi vs. K.N. Modi (1998) 3 SCC 573 , should
not be lightly interfered with, especially when the same has been substantially
acted upon by the parties. Family settlements are treated differently from
commercial settlements. Such settlement generally meet with the approval of
courts. They are governed by a special equity principle where the terms are fair
and bonafide, taking into account the well-being of the family. It is the duty of
the Court to give effect to such arrangements in the letter and spirit. (See
Harishankar Singhania (2) vs. Gaur Hari Singhania (2006) 4 SCC 658 ).
The categorical assertion of Sh. Sethi, the learned Senior Counsel for the
respondents that the impugned award has been acted upon and the parties have
taken control of the assets and businesses distributed under the award has not
been controverted by the appellants.
9. The only plea, which suggests the raising of a dispute to the existence of
family settlement was raised for the first time in the present appeals and reads as
follows:
“That a perusal of the award shows that instead of
FAO(OS) No.174/2004 Page 9 of 15
rendering an arbitration award, the learned arbitrator on
his own records that he was returning “a negotiated
family settlement agreeable to all the parties.” This
observation which is contrary to the records is a gross
misconduct on the part of the learned arbitrator besides
rendering of the award as illegal and bad in law.”
10. The above is a plea which was not raised before the learned Single Judge.
This plea also does not state that the said plea was raised before the learned
Single Judge and was not dealt with by him. In this view of the matter, we are
satisfied that the aforesaid objection raised by the appellant to the award at this
scope cannot be entertained. The same appears to be an afterthought to
improve upon the objections raised to the award before the learned Single
Judge. Since objections to an arbitral award have to be raised in a time bound
manner, it is not permissible to raise fresh objections after the expiry of the
limitation period, which was before the appellate court. Reliance placed by Mr.
th
November 1989
Sanjay Jain, Senior Advocate on the communications dated 4
sent by Shri S.N.P. Punj, and the communication sent by Shri Uday N. Punj
th
November 1989 to the arbitrator wherein they sought the exclusion of
dated 8
shares held in individual names from being considered for division, are not of
FAO(OS) No.174/2004 Page 10 of 15
th
November 1989, i.e.,
much importance in our view, since the award is dated 15
after the issuance of these communications. Often, parties take a stance in such
disputes, which is given up when a settlement is arrived at.
11. Mr. Sethi, the learned counsel for the respondent has also pointed out the
fairness of the award, inasmuch as, respondent no.1 V.P. Punj, the elder brother
of the appellant had offered to exchange his share with that of the appellant
S.N.P. Punj, and such offer was not accepted by the appellant. That is the
another factor indicating the fairness of the award.
12. Shri Sumeet Bansal has stated that Mrs. Aarti Singh was not even a party
to the reference before the arbitrator and as such, the arbitrator could not have
covered her property situated at 24, Vayu Nagar, Gwalior, (MP) in arbitration
proceedings. The learned Single Judge has dealt with the aforesaid issue in the
following terms:
“10. As far as objections vide I.A. No.5658/90
(I.A.No.6723/90) are concerned, the objector is with
regard to property bearing No.24, Vayu Nagar, Gwalior
on the basis of owner thereof. Contending that, this
property has been let out to M/s Lepinus Rockwool
FAO(OS) No.174/2004 Page 11 of 15
Private Limited – a company for Rs.4,000/- per month
with effect from Ist November 1989 and that the
arbitrator misconducted himself and the arbitration
proceedings by including this property. The reply by
respondent no.1 is that the record of the arbitration
proceedings demonstrates that the aforesaid property
was brought in the hoch-poch by respondent No.5 and
declared to be available for reallocation as part of the
property of the family; that the agreement covers the
wives and children as individual and their HUF and
certain outsiders who are close family friends
connected with the investment companies, and holding
properties. Item No.18 in Schedule-II sets out House
No.24, Vayu Nagar, Gwalior and discloses the current
owner. Similarly, House No.25 also brought
simultaneously from Mr. Sushil Kumar Verma shown
in the name of Rohini Chibba, D/o respondent no.11
(R.P. Punj) is also shown as property which is the
subject of distribution. The arbitration reference
clearly mentions that the parties and abovesaid firms
have factories and immovable properties as mentioned
in Schedule-II attached; that award in Schedule-IV
demonstrates that the aforesaid property has gone to the
share of respondent No.5.
The agreement, as pointed out above at serial
No.18 in Schedule-II, includes House No.24, Vayu
Nagar, Gawlior. It is also suggested from Schedule-II
that House No.25 has also been brought simultaneously
from Sh. Sushil Kumar Verma which is shown in the
name of Rohini Chibba, D/o respondent no.11 and all
these properties are shown the subject of distribution
and reallocation. This would go to show that this
applicant is a party to the agreement and the award and,
therefore, bound by the award and the remedy is by
way of objection under Sections 30-33 of the Act and
FAO(OS) No.174/2004 Page 12 of 15
the bar of suit contained in section 32 of the Act would
apply. I.A.6723/90 is disposed of accordingly.
According to the objector, Mrs. Arti Singh,
House No.24, Vayu Nagar, Gwalior has been let out to
M/s Lepinus Rockwool Private Limited for Rs.4,000/-
per month with effect from 1
st
November 1989. It may
be appreciated that the reference agreement is dated 9
th
October 1989, i.e., prior to the letting out of the
property to M/s Lepinus Rockwool Private Limited for
Rs.4,000/- per month. A certified copy of the power of
attorney dated 12
th
August 1975 executed by Mrs. Arti
Singh, D/o Sh. S. N. P. Punj in favour of her father
respondent No.5 suggests that respondent no.5 is the
constituted general power of attorney of the objector.
Apart from anything else, even on the strength of this
general power of attorney, the objector Smt. Arti Singh
could be legally bound by her attorney so long as the
power of attorney dated 12
th
August 1975, is not
revoked/cancelled by her.”
13. The above clearly shows that the Mrs. Arti Singh had made the Power of
th
August 1975 in favour of her father, i.e., the appellant Shri
Attorney dated 12
S.N.P. Punj and in fact, the said general power of attorney has still not been
revoked/cancelled. We have also noticed that no objection is said to have been
taken to the property in the name of Ms. Rohini Chibbar, the daughter of
respondent no.9 R.P. Punj also being included in the award of the arbitrator,
though Rohini Chibbar was in the same portion as Aarti Singh. It is not
FAO(OS) No.174/2004 Page 13 of 15
uncommon that properties are purchased by the parents in the names of their
children from out of the earning derived from family business. The parties, it is
evident sought to put all such properties in the common hotchpotch for
ascertaining the respective shares and dividing the properties and assets. Even
otherwise, the appellant Aarti Singh has not been divested of her rights in the
said property, inasmuch as, the said property has been allocated to the branch of
the family which is headed by her father Sh. S.N.P. Punj. Thus, it is evident
that properties in the names of all the members of the family including the
parents of Arti Singh by virtue of General Power of Attorney given by Arti
Singh were included in the terms of the reference and therefore, we are unable to
agree with the plea of Shri Sumeet Bansal and the same cannot be accepted. In
any case, if Mrs. Aarti Singh has any grievance, the same may be against the
appellant Sh.S.N.P. Punj, her father. In this view of the matter, we are satisfied
that the preliminary objection of the learned counsel for the respondent deserves
to succeed and the objections to the award cannot be entertained.
FAO(OS) No.174/2004 Page 14 of 15
14. Accordingly, we are satisfied that the order of the learned Single Judge
does not call for interference and consequently, the appeals are dismissed.
MUKUL MUDGAL
(JUDGE)
VIPIN SANGHI
(JUDGE)
March 03, 2009
dr
FAO(OS) No.174/2004 Page 15 of 15