Pawan Gupta & Anr. v. Kamal Gupta & Ors.

14. Of these four applications IA 40765/2024 merely seeks that IA 35767/2024, IA 39500/2024 and IA 39642/2024 be dismissed and cannot, therefore, be regarded as a separate or independent substantive application.

15. IA 35767/2024 has been filed by Rahul Gupta. The application prays that

(i) IA 13282/2023 be revived, and

(ii) Rahul Gupta be permitted to intervene in the arbitration to be present during the arbitral proceedings, and be permitted access to all pleadings in the arbitration.

16. IA 39500/2024 has been filed by Rahul Gupta and the intervenor companies. The application essentially prays that the order dated 22 March 2024, passed by Sachin Dutta J, as well as the reference of the disputes to arbitration, made by the said order, be recalled.

17. IA 39642/2024 has been filed by the intervenor companies, essentially seeking a restraint on Pawan Gupta, Kamal Gupta and the other parties in Arb P 1010/2022 dealing with their properties in the arbitration. An Advance Peek at the Outcome

18. Having heard learned Counsel, I am not inclined to accept the prayer for recall of the judgment dated 22 March 2024 passed by Sachin Dutta J. Mr. Sethi and Ms. Trivedi contended, and I agree with them, that such a prayer is to be made before the bench which passed the order, or before a higher appellate forum. It would be improper, my part, to recall or review the order passed by a coordinate Bench.

19. Mr. Sibal and Mr. Sai Deepak, arguing for Rahul Gupta advanced, however, an alternate prayer, for identifying the properties of Rahul Gupta and the intervenor companies, so as to ensure proper implementation of the undertaking recorded in para 17 and 18 of the judgment of Sachin Dutta J. For the reasons which would follow, I am inclined to allow this prayer. Some further prefatory observations

20. Before proceeding to do so, I may note that this relief, which, to my mind, appears innocuous, was contested by Pawan Gupta, as well as by Kamal Gupta, tooth and nail, fangs bared. Arguments continued for several days. While Kamal Gupta, through Mr. Gautam Narayan, learned Counsel, did not oppose delineation of the properties of the intervenor companies, as properties which would remain outside the scope of the arbitral proceedings, Pawan Gupta and Renu Gupta, through Mr. Sandeep Sethi and Ms Trivedi, completely opposed any identification of the properties which would remain outside

21. To my mind, such opposition is unconscionable, and even casts a cloud on the bona fides of the opponent-non-applicants. Before Sachin Dutta J, the undertaking of Pawan Gupta and Kamal Gupta, as well as all other petitioners and respondents in Arb P 1010/2022, to the effect that the properties of Rahul Gupta and of the intervenor companies would not form part of the arbitral proceedings, already stands recorded. As would become apparent from the recital hereinafter, the share of Rahul Gupta, and the properties of the intervenor companies, already stand admitted by Pawan Gupta as well as by Kamal Gupta. There can, therefore, be no legitimate objection to these properties being identified, so as to ensure that the undertaking recorded in para 17 and 18 of the judgment of Sachin Dutta J is honoured and not breached.

22. This identification has become necessary as certain events, which have taken place after the judgment dated 22 March 2024 of Sachin Dutta J, have given rise to a legitimate apprehension, in the mind of Rahul Gupta, that the undertaking recorded in paras 17 and 18 of the judgment of Sachin Dutta J has a chance of being breached or, at the very least, being misconstrued. The vehemence with which Pawan Gupta and Kamal Gupta opposed identification of the share of Rahul Gupta and the properties of the intervenor companies further confirms the apprehension, and makes it necessary that these properties be identified, so that further litigation and resultant acrimony can be avoided. Facts and trajectory of proceedings

23. 1st FSD dated 20 June 2015 23.[1] The story starts with the 1st FSD of 20 June 2015. The relevant portion of the FSD may be reproduced thus: “DEED OF FAMILY SETTLEMENT This deed of family settlement has been executed at Delhi on Saturday, this the 20th day of June, 2015 among the following members of a family:-

1. Sh. Kamal Kumar Gupta S/o Munna Lal Gupta Resident of C-19, Rana Partap Bagh, Delhi (hereinafter called the first party),

2. Sh. Pawan Gupta S/o Sh. Munna Lal Gupta Resident of C- 19, Rana Partap Bagh, Delhi (hereinafter called the second party),

3. Sh. Rahul Gupta S/o Sh. Kamal Kumar Gupta resident of C-19, Rana Partap Bagh, Delhi (hereinafter called the third party),

4. Sh. Mukesh Gupta S/o Sh. Gobind Ram Gupta Resident of C-19, Rana Partap Bagh, Delhi (hereinafter called the forth party) and

5. Sh. Mohit Gupta S/o Sh. Kamal Kumar Gupta resident of C-19, Rana Partap Bagh, Delhi (hereinafter called the fifth party) THE aforesaid parties shall include and comprise of their respective legal heirs and assigns.

WHEREAS the above five parties are the members of a family carrying on business of jewelry in India under the various trade names and titles and are owning various movable and immovable properties in the name of the above members of the family over which the family as a whole was having right and title.

AND WHEREAS the above parties have already entered into an oral partition of the all assets and liabilities of the family as on 30th September, 2014 according to which the residential house located at C-19, Rana Partap Bagh, Delhi has been allocated among the four parties numbered as party No.2 to party no. 5 in equal ratio i.e. 25% each. Besides this all other assets and liabilities have been allocated among the parties in the ratio as stated hereunder:

1. Sh. Kamal Gupta, First party 18%

2. Sh. Pawan Gupta Second party 23%

3. Sh. Rahul Gupta Third party 23%

4. Sh. Mukesh Gupta Forth party 18% and

5. Sh. Mohit Gupta Fifth party 18% AND WHEREAS a list of immovable properties owned by the family either in their personal name or in the name of the companies of which they are the shareholders was prepared and is being attached herewith as annexure Properties-1 to Properties 6 in which the annexure properties-1 to properties 5 are the properties shared by parties 1 to 5 hereabove respectively and the annexure properties-6 contain the list of properties, which are kept in common stock for future allocation in the abovesaid ratio at the time of realization or otherwise. Summary of properties being allocated is given here under where the last column excess(short) indicates the value in lacs of rupees by which the properties coming to the share of the party is in excess or short as compared to the value which comes to or which should be there to his share:- AND WHEREA the parties were having stock of precious metal and stones at various show room for which a stock summary was prepared and it was agreed upon among the parties that the same shall be allocated among the parties in the respective ratio given above. It was further agreed upon among the parties that the gap in allocation of the properties as detailed hereabove shall be met/covered from the stock or properties or combination of both coming to the share of the respective party in such a manner that the total of properties and stock received by each party is according to his share of the total of the same i.e. total of properties allocated and stock.” ANNEXURE: PROPERTY-1 PROPERTIES COMING TO THE SHARE OF SH.

KAMAL GUPTA, FIRST PARTY:- S.NO.

DESCRIPTION OF THE PROPERTY (IN BRIEF) VALUE (RS. IN LACS)

1. One third share in Agricultural lands situated in the Nazafgarh Zone 2 H-5, Netaji Subhash Place, Pitampura/Wazirpur - Deihl 3 Property No. 2681/83A, Beadonpura- (Gall NO. 2) Karol Bagh 4 1178, Kucha Mahajani Chandni Chowk 1000 Name (%) of share Annexure of properties Value of Properti es as per annexure Value of Properties as per sharing ratio Excess (short) (rupees in lacs) Sh. Kamal Gupta

18 Properties- 18930 16894.80 2035.[2] Sh. Pawan Gupta 23 Properties- 20400 21587.80 - 1187.80 Sh. Rahul Gupta 23 Properties -3 21980 21587.80 392.20 Sh. Mukesh Gupta 17200 16894.80 305.20 Sh. Mohit Gupta 15350 16894.80 - 1544.[8] TOTAL 93860 93860.00 5 94, Model Town 800 6 Rajkot 40 7 Kolkatta Office 600

PAWAN KUMAR GUPTA, SECOND PARTY:- BRIEF) VALUE (RS. IN LACS)

1. 2700, Des Bandhu Gupta Road, Show Room, 199 -201

2 Noida Zone Small 100 3 Jasola Vihar 125 4 Lalyalpur 75 5 Flat at vikashpuri 100 TOTAL 20400 ANNEXURE: PROPERTY-3 PROPERTIES COMING TO THE SHARE OF SH.

RAHUL GUPTA, THIRD PARTY:- BRIEF) VALUE (RS. IN LACS)

1. 2129-2130, Gurudwara Road, Karol Bagh- Old 2 PP School 5000

11 Plot No. 2, CC, Sector 3 Rohini 2250 12 R-2, Green Park 2250 TOTAL 21980 ANNEXURE: PROPERTY-4 PROPERTIES COMING TO THE SHARE OF SH.

MUKESH GUPTA, FORTH PARTY:- BRIEF) VALUE (RS. IN LACS)

1. 1/3rd share in Agricultural Lands in Nazafgarh Area 2 95, Model Town 800 3 Kolkatta Flat 500 4 Sadar Bazar, Gurgaon 2250

5 Poddar Card 650 6 16/2699, Naiwala/Des Bandhu Gupta Road, Karol Bagh Total 17200 ANNEXURE: PROPERTY-5 PROPERTIES COMING TO THE SHARE OF SH.

MOHIT GUPTA, FIFTH PARTY:- BRIEF) VALUE (RS IN LACS) 1 1/3rd share In Agricultural Lands in Nazafgarh area 2 90, Model Town 800 3 674-675, Sadar Bazar 100 4 Bombay Office 150 5 83/31, East Park Road 5000 6 f-30,Sector 18, Noida 1300 Total 15350 ANNEXURE: PROPERTY-6

PROPERTIES TAKEN IN COMMON STOCK OF THE PARTIES: BRIEF) VALUE (RS IN LACS)

6 Greater Noida 7 PP Tower 8 C-12/4 Rana Partap Bagh 9 Plot No.4, C-8, Rana Partap Bagh 23.[2] The 1st FSD of 20 June 2015, though purporting to apportion certain properties from the total family estate to Rahul, vide “Annexure Property-3”8 to the 1st FSD, as representing 23% of the estate, was not signed by Rahul.

24. 2nd FSD dated 9 July 2019 24.[1] While Rahul was identified as the “3rd party” in the FSD dated 20 June 2015, he was not made a party at all, in the FSD dated 9 July

2019. 24.[2] The relevant clauses of the FSD dated 9 July 2019 maybe reproduced as under: “WHEREAS

I. The aforementioned parties, all signatories to this MOU[9], are closely related family members, who joined the business at different times and each has contributed to the growth of the business ever since each joined and their contribution is invaluable to the business. “Annexure 3” hereinafter (which does not include Rahul) Out of the common funds, various companies were incorporated wherein the shareholdings have been held by the family members, various firms were constituted by the family members and out of the common funds from these businesses, various immovable and movable assets were purchased/acquired in the names of family members and/or above companies, while continuing the operations of all such companies and businesses under the flagship “PP Jewellers Private Limited”.

II. Differences have arisen between the family members due to different opinions on style of functioning and non-attainment of admission and growth of the business. The dispute/differences necessitated a division of assets, businesses and proportional apportionment of liabilities to each group for a harmonious continuance of familial relations.

III. Several rounds of discussions were held, and drafts of settlements exchanged, oral understandings were arrived at, recorded, and were partially acted qua the share of PG10, in respect of business carried on by the PG Group, at his allocated showroom i.e. Karol Bagh, New Delhi independently, but under the PP Jewellers Pvt Ltd. The said understanding could not be fully acted upon, materialised as Mr. Rahul Gupta, son of Mr. Kamal Gupta was seeking a separate division of assets and business for himself, which were in excess of his individual share. However, in order to accommodate his claims, the family members had agreed apportioned the shares, in the assets and liabilities, business in terms of the valuation, which were allocated as following:

1. KG (Kamal Gupta) 18%

2. PG (Pawan Gupta) 23%

3. Rahul Gupta 23%

4. MG (Mukesh Gupta) 18%

5. MKG (Mohit Gupta) 18%

IV. However, on account of refusal by Rahul Gupta, even to accept such 23% share and cooperate with the above division and since Mr. Rahul Gupta has taken control of certain assets of Joint Family group, without discharging his share of the liabilities and he has been working separately since 2015, without any knowledge/consent of either KG or PG groups (KG and PG Groups have no access to his personally controlled business affairs), the family members are now of the unanimous view that the deliberations with Mr. Rahul Gupta to arrive at an amicable resolution, has already more than significantly delayed and any further loss of time, would continue to affect the overall global (the abbreviation used in the FSD to denote "Pawan Gupta") settlement, consequently hindering the growth of the business interests of the whole group. The feelers and communications sent to Mr. Rahul Gupta through well-wishers, near and dear, to sit across for settlement have been in vain till date. *****

VII. Although, the alleged claims of Mr. Rahul Gupta, remain unresolved for the time being, as his share of 23% has been included in the share of KG Group, Mr. Kamal Gupta has taken over the responsibilities/accountabilities/liabilities of Mr. Rahul Gupta, as on 30.09.2014. It is made clear that the decision taken under this MOU shall be binding upon all the parties, who have agreed and signed this MOU, and shall not be altered in any circumstance. On the basis of the assurance of all concerned, the Group has agreed to this Family Settlement and again approach the banks/agencies to avail benefits and ensure payment thereof.

VIII. Keeping in mind that Mr. Rahul Gupta has neither participated in discharge of liabilities as on 30.09.2014 nor he is cooperating in reaching the full family business settlement, in order to ensure that the group would be able to utilise OTS, if sanctioned, by the Banks, the following framework for family settlement has been agreed between the parties to the MOU. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1. The share of Rahul Gupta – 23%, which includes liabilities of the five companies/firms namely:

(i) P.P. Jewellers Pvt Ltd.

(ii) P.P. Jewellers (Exports)

(iii) P.P. Jewellers (Delhi)

(iv) Appy Diamonds Pvt. Ltd.

(v) L.R. Builders Pvt. Ltd.

existing as on 30.09.2014, and his share and the assets, has been apportioned to the share of KG Group. KG Group has taken over the responsibilities/accountabilities/liabilities, therefore, in the event of any dispute is based by Mr. Rahul Gupta, his legal heirs and/or by anyone on his behalf, with regard to any claim in respect of business or assets dealt with in the present framework, under this MOU, shall be the sole responsibility of Kamal Gupta (KG) Group alone. PG Group shall not be responsible/accountable/liable for such claims of Mr. Rahul Gupta.

2. A detailed list and valuation of the Assets and businesses, on which Mr. Rahul Gupta Group is having control and claiming its exclusive control (though disputed by the signatories to the MOU) is drawn and attached as Annexure A and signed by all the parties.

3. Out of the remaining assets/business of the group, other than that claimed by Mr. Rahul Gupta, mentioned in Annexure A, there are certain assets which have been identified by parties but are not being dealt with in the present MOU, by reason of personal issues or legal impediments. A detailed list of such properties is being attached as Annexure B to this MOU and signed by all parties. It is agreed that these assets/businesses shall also be apportioned in the same manner i.e. KG Group – 77% and PG Group – 23%.

4. With respect to the residential houses C-19, Rana Pratap Bagh, New Delhi, an undivided common property, the right, title and interest, in this property shall be apportioned to KG Group – 75% and PG Group – 25%.

5. The net asset value of the immovable properties, as on 30.09.2014, were already determined and immovable properties were earmarked and allocated amongst the KG Group and the PG Group, as on 30.09.2014 as mentioned in Annexure C (signed by all the parties), whereas, the assets allocated to PG Group, towards his share of 23% is mentioned in Annexure C-1 (signed by all the parties) and the liabilities, as on 30.09.2014, were also identified and mentioned in the tabular form and annexed as Annexure D (signed by all the parties). …

6. The parties agree that for the purpose of this Family Settlement, since division of assets and liabilities, the net value of assets and businesses (after taking into account, liabilities, as on 30.9.2014), were already determined/divided and accepted by the parties. The assets allocation in respect of PG Group shall remain as it is, as shown in Annexure ‘C’ with 50% share of 2129-2130, Gurudwara Road, Karol Bagh, New Delhi. However, KG Group has rearranged the properties amongst its own constituent, as detailed in Annexure E. ***** ANNEXURE B (Details of Common Properties)

7 P P Tower 8 C-12/4, Rana Pratap Bagh 9 Plot No.4, C-8, Rana Pratap Bagh 10 C-19, Rana Pratap Bagh Annexure C S.No. Description of the property Value Rahul Gupta 1 2129-2130, Gurudwara Road, Karol Bagh-Old 30.00 2 PP International School 50.00

10 Plot No.23 Defence colony 12.50 11 Plot No.2, CC, Sector 3 Rohini 25.00 12 R-2, Green Park 20.00 13 Garment Unit 3.00 222.80 Pawan Gupta 1 2700, Des Bandhu Gupta Road, Show Room 200.00 2 Jasola Vihar 1.25

204.00

80.00 2 H-5, Netaji Subhash Place Pitampura Delhi 50.00 3 Gali No.2- 2681/83A, and 2547, Beadon pura- Karol Bagh 25.00 4 1178, Kucha Mahajani and 420, haider ali, Chandni Chowk

10.00 5 95, Model Town 8.00 6 4262-4265, gali bharon wall, jogiwara Nai Sarak

8.00

1.00 189.30 Mukesh Gupta 1 1/3rd share in Agricultural Lands in Nazafgarh Area 80.00 2 94, Model Town 8.00

3 Kolkatta Flat 5.00 4 Ram Leela Ground, Gurgaon 22.50 5 Poddar Card 6.50 6 16/2699, Naiwala/Des Bandhu Gupta Road, Karol Bagh 50.00 172.00 Mohit Gupta 1 1/3rd

80.00 2 90, Model Town 8.00 3 674-675, Sadar Bazar 1.00 4 Bombay Office Ganesh Market

1.50 5 F-30, Sector 18, Noida 13.00 6 83/31, East Park Road 50.00 153.50 Annexure E S.No. Description of the property Value 1 1/3rd 69.00 2 H-5, Netaji Subhash Place, Pitampura-Delhi

50.00

3 Gali No.2 – 2681/83A, and 2547, Beadon pura – Karol Bagh 25.00 4 1178, Kucha Mahajani and 420 haider ali Chandni Chowk 10.00 5 2129-2130, Gurudwara Road, Karol Bagh-Old (58.33%)

17.50 6 95, Model Town 8.00 7 4262-4265, gali bharon wali, jogiwara Nai Sarak

8.00

0.50

1.00

197.85 Mukesh Gupta 1 1/3rd

69.00 2 16/2699, Naiwala/ Des Bandhu Gupta Road, Karol Bagh 50.00 3 415A/3, Ram Leela Ground, Gurgaon

22.50

25.00 4 94, Model Town 8.00 5 Kolkatta Flat 5.00 6 Poddar Card 6.50

198.50 Mohit Gupta 1 1/3rd

69.00 2 R-2, Green Park 20.00 3 83/31, East Park Road 50.00 4 Bombay 30.00

5 Plot No.5, Lajpat Nagar 20.00 6 Bahadurgarh – Factories-2 17.00 7 F-30, Sector 18, Noida 13.00 8 674-675, Sadar Bazar 1.00 9 90, Model Town 8.00

17.00 3 QADIPUR (Purnima Buildmart Pvt. Ltd.)

7.50 4 BAKOLI (M.G. Buildcon 4.00 5 RAWTA (Glow Jewellery 3.00 6 DAULATPUR (P.G. Colonisers Pvt. Ltd.)

1.00 7 PAPRAWAT (Maa Jagdamba Town Planners 0.50 8 Burj 10.00 9 Dubai 3.25 10 Garment Unit 3.00

99.25 The Companies enlisted in the Table in Annexure A to the FSD dated 9 July 2019, under the head “Companies in Full/Partial Control of Rahul Gupta Group)” were

(i) Glow Jewellry Pvt Ltd,

(ii) M.G. Buildcon Pvt Ltd,

(iii) M.G. Buildmart Pvt Ltd,

(iv) Maa Jagdamba Town Planners Pvt Ltd,

(v) P.G. Colonisers Pvt Ltd,

(vi) P.P. International School,

(vii) P. Sen (Technical Services) Pvt Ltd,

(viii) P. Sen (Engineering) Pvt Ltd,

(ix) P.V. Buildmart Pvt Ltd,

(x) Purnima Associates Pvt Ltd,

(xi) Purnima Buildmart Pvt Ltd,

(xii) Purnima Colonisers Pvt Ltd,

(xiii) Shree Radhey Colonisers Pvt Ltd,

(xiv) Veena Buildcon Pvt Ltd,

(xv) Vasant Associates Pvt Ltd.

24.[3] It goes without saying that Rahul Gupta cannot be bound by the distribution of assets either in the 1st FSD or the 2nd FSD, as he was not a signatory to the 1st FSD and was not even a party in the 2nd FSD. 24.[4] Indeed, the 2 FSDs, seen together, present a very peculiar contractual dispensation. Even while accepting that Rahul Gupta is entitled to 23% of the entire family properties, the 1st FSD, without his consent, concurrence of signature, allocate certain properties to him as representing his 23% share. The 2nd FSD is even more peculiar. It does not even make Rahul Gupta a party. In a manner with which I, at least, am unfamiliar, Pawan Gupta and Kamal Gupta, between themselves, suo motu ordained that the properties enlisted in Annexure 3 to the 1st FSD would constitute the 23% share in the entire family estate to which Rahul Gupta was admittedly entitled and, by the 2nd FSD, further ordained that Rahul Gupta’s share would be apportioned to the Kamal Gupta group. The entire arrangement has taken place behind the back of Rahul Gupta. He is not a signatory to the 1st FSD, and has not even been inducted as a party to the 2nd FSD. 24.[5] Inasmuch as both the FSDs are subject matter of the pending arbitration, I refrain from saying anything further. In the ultimate eventuate, it may fall to the learned Arbitrator to take a call regarding the validity and sanctity of the 2 FSDs. 24.[6] At the very least, however, even these facts to make out a case for passing appropriate orders to ensure that the undertaking furnished by Pawan Gupta and Kamal Gupta, as recorded in paras 17 and 18 of the judgment of Sachin Dutta J, is not misused, and the admitted 23% share of Rahul Gupta in the family estate and properties is not jeopardised. 24.[7] Repeatedly, in the 2nd FSD, it is emphasised that the parties to the 2nd FSD have agreed to its contents and are bound by them. This amounts to an express acknowledgement, therefore, that Rahul Gupta would not be bound by the terms of the 2nd FSD, as he was not even been made a party thereto. 24.[8] Two uncontestable legal propositions flow from this. The first is that Rahul Gupta is entitled, by oral partition of the assets of the family on 30 September 2014, as also acknowledged in both the FSDs, to 23% of the total assets of the family. The 2nd is that Rahul Gupta cannot be bound by the division of assets as contained in the Annexures to either of the FSDs, as he was not a signatory to the 1st FSD and was not even a party to the 2nd FSD.

25. Arb P 1010/2022 and the Judgment dated 22 March 2024 of Sachin Dutta J 25.[1] The judgment of Sachin Dutta J adjudicated, to the extent it is relevant for the purposes of the present applications, Arb P 1010/2022, preferred by the Pawan Gupta group under Section 11(5) of the 1996 Act, whereby disputes, which were stated to have arisen between the Pawan Gupta group and the Kamal Gupta group, but sought to be referred to arbitration. Admittedly, the disputes which Pawan Gupta sought referred to arbitration involved implementation of the FSDs. 25.[2] Kamal Gupta, in his reply to Arb P 1010/2022, filed on or around 15 December 2022, objected to the prayer to refer the dispute to arbitration. From the reply, the following paras merit reproduction:

Vidya Drolia v Durga Trading Corporation, (2021) 2 SCC 1 iii. When cause of action and subject-matter of the dispute relates to inalienable sovereign and public interest functions of the state and hence mutual adjudication would be unenforceable. iv. When the subject-matter of the dispute is expressly or by necessary implication non-arbitrable as per mandate of the mandatory statute(s).

4. That the present case clearly falls within the test No.i and ii where the subject matter of the dispute is clearly affecting 3rd party rights of non-signatory family members and shareholders of family businesses, 1 one of them being the son of the Respondent No 1 – Rahul Gupta and admittedly a majority shareholder in different entities of PP Jeweller Group AND other business entities.

5. The non-arbitrability of the alleged disputes propounded by the Petitioners herein is patent from the following: • Rahul Gupta - unnecessary a necessary party (23% crores gross shareholder, family member and the Son of the Respondent No. 1), not being a signatory to the 2019 MOU particularly when many of the assets and liabilities sought to be divided allegedly carry his substantial holding – See Recital 3, 4, Illegal assumptions in Recital 7, Clause 1, 2 and Annexure A to the 2019 MOU; • Rahul Gupta’s duly recorded categorical refusal to participate in the 2019 MOU (including arbitration clause) – See Recital 4 of 2019 MOU; Recital III categorically records the claim of Rahul Gupta seeking separate division of assets and business. ***** • Peculiar, Inexecutable Family Settlement without proper identification of companies, assets, liabilities or businesses of the group business sought to be divided. ***** • Non-inclusion of Companies (Respondent 7 to 13 and 39 other Companies) in the settlement procedure while allegedly partitioning the assets owned by these companies/fixing an arbitration clause behind closed doors vide clause 16 of the 2019 MOU- the said entities clearly not being bound by the settlement or the arbitration clause; Absence of any resolution or majority shareholder’s consent, sanctioning the substantial decisions purportedly made vide the 2019 MOU regarding the assets and liabilities of the Respondent Business entities i.e. R[7] to R13- - the said entities clearly not being bound by the settlement or the arbitration clause. ******

7. That apart from the companies arrayed as respondents in the present petition, following companies have also been established by the members of the family. The purported deeds relied upon by the petitioners nowhere records any asset/liability of these entities nor there is any mention of any division of their businesses. This incomplete deed cannot therefore divide the assets/business or any liability of the group business making it a classic case where a mutual adjudication cannot determine the rights and liabilities of the parties in rem. Following is the list of companies not discussed or mentioned anywhere in the deed:

9 Kavee Apparels Private Limited 10 KSD Properties Private Limited 11 KVRealcon LLP 12 KVMRealtech Private Limited 13 L R Builders Pvt Private Limited

14 Luxury Apparels Private Limited 15 M. G. Buildcon Private Limited 16 M. G. Buildmart Private Limited 17 Maa Jagdamba Town Planners Pvt Ltd

18 Orange Sky Promotors Private Limited 19 P Sen (Enginering) Pvt Ltd 20 P. G. Colonisers Private Limited 21 P. Sen (Technical Services) Pvt Ltd 22 P. V. Buildmart Private Limited 23 P.P.Jewels Private Limited

28 Shree Vishnu Apparels Private Limited 29 V K Mall Private Limited 30 V.K. Buildmart Private Limited 31 Vasant Associates Private Limited

37 Veenkamal Infrastructure Private Limited 38 VKM Buildcon Private Limited 39 VRG Realtech Private Limited Implementation of the 2019 MOU outside the jurisdiction of Arbitrator *****

11. It is submitted that the Doctrine of inclusion of nonsignatories is meant as an exception and not the rule. The exceptional circumstances in which a non-signatory may be compelled to participate in an arbitration are where: a. a non-signatory has given implied consent or; b. is an alter-ego signatory or; c. part of the same group of companies or; d. a party to the composite transaction or; e. where a non-signatory knowingly received benefits under the Agreement. The subject 2019 MOU at Recital 3 and 4 categorically records the refusal on part of the family member and shareholder Rahul Gupta from being party to the alleged family settlement and the arbitration agreement contained therein. This non-signatory is a 3rd party who seeks separate division of assets and group business and has refused to accept the 23% share apportioned to him. This nonsignatory has admittedly taken control of the assets of the Joint Family Group and is in control (not arising out of the Family Settlement) of multiple businesses mentioned in Annexure A to the 2019 MOU. The signatories to the 2019 MOU have mutually adjudged the share of Rahul Gupta to 23% and have apportioned his said share to the Respondent No.1. This person being a non-signatory therefore cannot be said to fall in any of the abovesaid category and further any adjudication by the arbitrator w.r.t his share in the family businesses will be an illegality in the eyes of law.” *****

25.[3] Thus, in the reply filed by way of response to Arb P 1010/2022, the stand of Kamal Gupta was clear and categorical. He contested the very arbitrability of the disputes forming subject matter of the Arbitration Petition, going to the extent of pleading that the FSDs were not enforceable, as they dealt with third party assets, including those of Rahul Gupta and the intervenor companies, without making them parties. It was further categorically accepted that Rahul Gupta was not bound by the FSDs, as he was not a signatory to either of them. Kamal Gupta also contested the legality of the dispensation, in Clause 1 of the 2nd FSD dated 9 July 2019, to the extent it allocated, to Kamal Gupta, the share of Rahul Gupta in the family properties. 25.[4] The submissions of Kamal Gupta, in his reply to the Arbitration Petition, were echoed by PP Jewellers, as Respondent 7 in the Arbitration Petition, in the reply filed by it. 25.[5] Thus, in their replies to Arb P 1010/2022, Kamal Gupta and P P Jewellers both urged, in one voice, that

(i) the subject matter of the dispute which Pawan Gupta sought reference to arbitration clearly affected the rights of Rahul Gupta in the family property,

(ii) Rahul Gupta was a majority shareholder in different entities of the PP Jeweller Group and other business entities,

(iii) Rahul Gupta was a 23% gross shareholder in the family estate and properties,

(iv) the disputes also sought to refer, to arbitration, rights of assets owned by several companies who were not parties to the FSDs,

(v) among these, in the table contained in para 7 of the reply, are included all the intervenor companies,

(vi) any adjudication, by the arbitrator, of Rahul Gupta’s share in the family businesses would be a nullity in the eyes of law, and

(vii) the unilateral allocation and merging of the 23% share of

Rahul Gupta in the family estate in the share of Kamal Gupta, without Rahul Gupta being made a signatory to the 2nd FSD, was illegal, unenforceable, and rendered the contract nonarbitrable. This Court is perfectly clear in its view that Kamal Gupta cannot, now, be permitted to resile from these assertions, all of which have been made on oath. 25.[6] Surprisingly, having so staunchly opposed the prayer of Pawan Gupta, in Arb P 1010/2022, to have the disputes between his group and the Kamal Gupta group referred to arbitration, Kamal Gupta, immediately on Rahul Gupta seeking to intervene in the proceedings, executed a volte face and acquiesced to refer the disputes to arbitration, as would be apparent hereinafter. 25.[7] On or around 13 July 2023, Rahul Gupta filed IA 13282/2023, seeking permission to intervene in Arb P 1010/2022 as a respondent. It was specifically pleaded, in the said application, that the FSDs were illegal and unenforceable in law, to the extent they purported to deal with the share of Rahul Gupta in the family properties. In that view of the matter, it was submitted that, in the interests of justice, Rahul Gupta was required to be permitted to intervene in the Arbitration Petition. 25.[8] A parallel application, IA 12227/2023, was also filed by Rahul Gupta in OMP (I) (Comm) 198/2023, which was being heard along with Arb P 1010/2022, seeking intervention in the OMP. 25.[9] OMP (I) (Comm) 198/2023 came up for hearing on 13 July 2023 before the learned Single Judge, who was informed by Pawan Gupta as well as Kamal Gupta – who had, thithertofore, been a staunch opponent of the request for referring the disputes to arbitration – that a joint memorandum had been drafted by them, seeking that the disputes be referred to arbitration. The learned Single Judge noted the submission and directed that the matter be listed for arguments, with both sides (Pawan Gupta and Kamal Gupta) being directed to file written submissions. Interestingly, no joint memorandum was available on the record of this Court on the said date, as is also noted by the learned Single Judge in his order.

25.10 Significantly, a mere five days after IA 12227/2023 in OMP (I) (Comm) 198/2023, and IA 13282/2023 in Arb P 1010/2022, were filed by Rahul Gupta, seeking to intervene in the OMP and in the Arbitration Petition, a joint memorandum, to which Kamal Gupta – who had earlier vociferously opposed reference of the disputes to arbitration in the reply to the Arbitration Petition – was a party, was filed before this Court on 18 July 2023, agreeing to reference of the disputes to arbitration. Thus, it is clear that, consequent on IA 12227/2023 and 13282/2023 having been filed by Rahul Gupta, seeking intervention in the OMP and in the Arbitration Petition, Kamal Gupta had a complete change of heart, and now felt that the disputes were eminently amenable to resolution by arbitration.

25.11 Assailing the order dated 13 July 2023 of the learned Single Judge, Rahul Gupta approached the Division Bench of this Court by way of FAO (OS) (Comm) 149/202312. The Division Bench disposed of the FAO by order dated 21 July 2023, with a direction to the learned Single Judge to consider and decide IA 12227/2023, filed by Rahul Gupta in OMP (I) (Comm) 198/2023. Rahul Gupta v Kamal Gupta & ors

25.12 When the present Arbitration Petition next came up for hearing before the learned Single Judge on 1 August 2023, the learned Single Judge, while recording the joint submission of Pawan Gupta and Kamal Gupta that the joint application for reference of the disputes to arbitration had been filed by them, observed that, in view of the order dated 21 July 2023 passed by the Division Bench in FAO (OS) (Comm) 149/2023, he was required to also decide IA 13282/2023 in the Arbitration Petition.

25.13 Thereafter, the learned Single Judge went on to hear detailed arguments in OMP (I) (Comm) 198/2023 as well as Arb P 1010/2022, culminating in the passing, by him, of the judgment dated 22 March 2024 supra. The following passages, from the judgment, merit reproduction:

the FSD records the prior division of assets between the parties. Annexure ‘C-1’ records the additional asset allocated to ‘Pawan Gupta Group’ towards its share. Annexure ‘D’ identifies the liabilities of the parties. Annexure ‘E’ rearranged the properties of the Kamal Gupta Group amongst its own constituents which included Mr. Rahul Gupta.

5. Mr. Pawan Gupta and her wife Mrs. Renu Gupta (i.e. the petitioners) described as “Pawan Gupta Group” in the FSD are aggrieved since the “Kamal Gupta Group”, as described in the FSD, has not performed its obligation arising from the FSD. In particular, Pawan Gupta Group is aggrieved since the immoveable property bearing no. 2700, Desh Bandhu Gupta Road, Karol Bagh, New Delhi i.e., the Karol Bagh showroom of P.P. Jewellers, falling to its shares as per the FSD, has not been transferred to it. It is also aggrieved on account of Kamal Gupta Group not providing Pawan Gupta Group its share in the stocks of the family business.

6. Disputes having arisen between the parties, Pawan Gupta filed a petition under Section 9 of the A&C Act, inter alia seeking urgent protective orders with reference to implementation of the FSD. Vide judgment/order dated 05.07.2022 in O.M.P (I) (COMM) No. 186/2022, the said petition was partly allowed and Kamal Gupta Group was restrained from alienating or creating third party rights in respect of the immovable properties including property bearing no. 2700 Desh Bandhu Gupta Road, Karol Bagh, New Delhi falling to Pawan Gupta's share till the time the matter is considered by the Arbitral Tribunal.

7. Thereafter, the petitioners sent a notice invoking arbitration dated 08.07.2022 upon the Kamal Gupta Group. The said notice was duly replied by the Kamal Gupta Group vide letter dated 16.07.2022 raising certain objections to the appointment of arbitrator. Consequently, the present petitions came to be filed. *****

13. Learned senior counsel for the respondents submitted that while the petitioners have breached the FSD, the respondents do not oppose referring the disputes to arbitration. It was further submitted that Rahul Gupta's intervention applications lack merit and should be dismissed. He submitted that the Pawan Gupta Group and Kamal Gupta Group, through a joint memorandum, have limited their claims and counterclaims to companies and assets where they hold majority ownership. This, he argued, demonstrates that the arbitration proceedings will not prejudice Rahul Gupta's rights. It was submitted that Rahul Gupta holds minority shares in only two of the companies proposed to be referred to arbitration (PP Jewellers Pvt. Ltd. and Vasant Associates Pvt. Ltd.). He asserts that as a minority shareholder, Rahul Gupta cannot object to the majority's decision to pursue arbitration. It was emphasized that the arbitral award will solely bind the Pawan Gupta Group and Kamal Gupta Group in respect of their internal disputes. Rahul Gupta, he maintained, will not be bound by the award to the extent that it infringes upon his legitimate interests. He argued that accepting Rahul Gupta's position would effectively paralyze any potential arbitration arising from a Family Settlement Agreement, allowing a single family member to obstruct the process even when the majority desires a resolution through arbitration. It was clarified that the companies involved are not seeking a merger, demerger, or amalgamation, but are merely having their rights established through arbitration. Therefore, he contended that the NCLT lacks jurisdiction to adjudicate matters pertaining to the FSD. He pointed out that the Kamal Gupta Group has shifted its initial stance and now supports implementing the FSD for the greater good of the family group. He submitted that arbitration will lead to a swift dispute resolution within the family, contrasting it with the lengthy process of a partition suit. In respect to the DRT orders, he submitted that any arbitral award would be subject to existing restraint orders issued by the DRT. He also submitted that FSD is not required to be stamped. Lastly, he argued that the suit filed by the intervening companies is a classic example of a deliberate attempt to obstruct the legal process, particularly the arbitration proceedings. *****

16. I have considered the submissions of Mr. Rahul Gupta and the intervenor companies, I find no merit in the same. The reasons are enumerated hereunder.

17. The apprehension of the intervenors that in the proposed arbitration the parties will deal with the properties of intervenors since the same have been mentioned in the FSD is misplaced. A categorical statement has been made by learned senior counsel for petitioners and respondents that none of the properties owned by the intervenor companies, though mentioned in annexures of the FSD, will be dealt/divided by the said parties in the arbitration. Even assuming the arbitrator deals with the property of intervenor companies, in view of Section 35 of the A&C Act, the resultant arbitral award would not be binding on the intervenors. The intervenors/third party thus can be permitted to intervene in enforcement proceedings and raise necessary pleas to resist execution/enforcement of the arbitral award affecting its right.

18. In the facts of the present case, it cannot be said that the arbitral proceedings will be futile, ineffective, and would be a no result exercise. The intent of Pawan Gupta Group and Kamal Gupta Group when they executed FSD, was to settle their inter se disputes while at the same time not affecting the rights and interest of Mr. Rahul Gupta. The presence of Mr. Rahul Gupta and intervenor companies before the arbitrator is not essential for adjudication of disputes between the said two groups. For the said reason, the decision in South India Biblical Seminary13 is distinguishable. The decision of Vinod Kumar Sachdeva14, wherein the order of the High Court allowing an application under Section 8 of the A&C was reversed by the Supreme Court, is inapplicable to the facts of the present case since in that case the plaintiff had sought reliefs against non-signatories to the concerned agreement. It was held that non-family shareholdings, who are not parties to the MoU, cannot be bound by the terms of the document. In the present case, the petitioners have sought reliefs only against signatories to the FSD and companies in which signatories to the FSD have majority shareholding, and which companies have also consented to be bound by the arbitration agreement by appending their signatures to the joint application.” (Emphasis supplied)

25.14 The submissions of Pawan Gupta, before Sachin Dutta J, as recorded in para 17, are significant.

25.15 Firstly, it was acknowledged that there was a complete shift in stance by Kamal Gupta, from a vociferous opponent to a willing votary, for referring the disputes to arbitration. It is not for this Court to divine the reason for this wholesale abandonment, by Kamal Gupta, of his objections; suffice it to state that it is, at the very least, unsettling.

25.16 More importantly, Pawan Gupta submitted that “arbitration (would) lead to a swift dispute resolution within the family, South India Biblical Seminary v Indraprastha Shelters (P) Ltd, 2022 SCC OnLine Kar 915 Vinod Kumar Sachdeva v Ashok Kumar Sachdeva, 2023 SCC OnLine SC 878 contrasting it with the lengthy process of a partition suit”. What this submission conveniently ignores, whether innocently or by design, is the fact that, in a partition suit, Rahul Gupta, as well as the intervenor companies, would have been parties in the entire process throughout, whereas, by first executing FSDs which admittedly dealt with the share and properties of Rahul Gupta and the intervenor companies without making them parties thereto, and thereafter, seeking reference of the FSDs to arbitration, the entire properties, which would include not only the properties of the intervenor companies but also Rahul Gupta’s 23% share in the entire family estate, would be subjected to arbitration, without including Rahul Gupta, or the intervenor companies, in the exercise.

26. Events that transpired after the judgment of Sachin Datta J. 26.[1] Just a month after the passing of the judgment dated 22 March 2024 of Sachin Datta, J., Kamal Gupta filed WP (C) 5691/2024 before this Court against the Delhi Development Authority. In the said writ petition, Kamal Gupta claimed to be rightful owner of the property at H-5, Netaji Subhash Place15. This is contrary to Kamal Gupta’s assertion, in para 5 of his reply to Arb. Pet.1010/2022, in which it is acknowledged that Rahul Gupta is a 23% gross shareholder in the family properties. Para 35 of the said reply further acknowledges that the merger of the 23% share of Rahul Gupta in the family properties with the share of Kamal Gupta was illegal and that Rahul Gupta could not be bound thereby. “H-5” hereinafter 26.[2] That the intention of Kamal Gupta is not wholly honorable is also apparent from the fact that while, in para (ii) of WP (C) 5691/2024, Kamal Gupta and PP Jewellers claimed to be the “rightful owner” of H-5, when the writ petition came for hearing before the learned Single Judge of this Court on 24 April 2024, Kamal Gupta and P P Jewellers – characteristically, this Court is constrained to observe – again executed a volte face and submitted that they were not claiming ownership rights to H-5. This is so recorded in para 13 of the order passed by this Court on 24 April 2024 in WP (C) 5691/2024:

26.[3] Moreover, Rahul Gupta has placed on record, in para 4 of IA 35767/2024 (on behalf of L R Builders Pvt Ltd and Purnima Associates Pvt Ltd), a conveyance deed dated 23 December 2004, conveying the aforesaid property to L R Builders Pvt Ltd. 26.[4] Though a detailed reply to IA 35767/2024 has been filed by Pawan Gupta on the one hand and by Kamal Gupta and PP Jewellers on the other, both the replies are completely silent regarding the conveyance deed dated 23 December 2004. There is, therefore, an implicit admission that the H-5 property actually belongs to LR Builders, which is under the control of Rahul Gupta. 26.[5] In these circumstances, Rahul Gupta, on behalf of L R Builders Pvt Ltd and Purnima Associates Pvt Ltd, filed IA 35767/2024, seeking permission to be present in the arbitral proceedings, so as to ensure that the undertaking recorded in para 17 of the order dated 22 March 2024 of Sachin Datta, J., was not breached, and the properties of Rahul Gupta and the intervenor companies were not subject matter of 26.[6] On the said application, this Bench passed a detailed order on 7 August 2024, permitting the authorized representative of L R Builders and Purnima Associates Pvt Ltd to be present during the arbitral proceedings. 26.[7] Most disturbingly, just over a week of passing of the said order, Kamal Gupta, through counsel, addressed the following email to the learned Arbitrator on 16 August 2024: “Gautam Dhamija <gautam@mimansalaw.in> Fri, Aug 16, 2024 at 12:29 PM To: Harshit Khanduja <hkhanduja1@gmail.com> Cc: Justice Sanjay Kishan Kaul <office.justicekaul@gmail.com>, "rahuiguptaassociates@gmall.com" <rahulguptaassociates@gmail.com>, "chaitanya@mimansalaw.in" <chaitanya@mimansalaw.in>, "piyush32159@gmail.com" <piyush32159@gmaiI.com>,"ajai.goyal@ppjeweller.com" <ajai.goyai@ppjeweller.com> Sir, This is regarding the email dated 10.08.2024 issued by Mr. Rahul Gupta citing the order dated 07.08.2024 passed by the Hon'ble High Court of Delhi. Vide the said email, Mr. Rahul Gupta, on his behalf and on behalf of 2 companies he represents, has requested your good self to be allowed to be present in the proceedings, obtain copies of the pleadings and orders passed and future VC links, and update on the dates to be given. Sir, we vehemently object to these requests as they are mala fide in nature and only in order to disturb the arbitration proceedings. The apprehensions of Mr. Rahul Gupta and his 2 companies, as regards their properties, have already been addressed by the referral order dated 22.03.2024, where counsels for KG and PG Groups have made the statement before the court not to deal with any of the companies where Rahul Gupta has majority shareholding nor any properties owned by such companies. Mr. Rahul Gupta has again agitated the same issue before the Delhi High Court and has misled the Ld. Single Judge to pass the order dated 07.08.2024. It is pertinent to notice that the said order is qua the apprehensions of Rahul Gupta regarding property bearing no. H-5, Netaji Subhash Place, Wazirpur, Delhi-110034, allegedly owned by M/s LR Builders Pvt. Ltd., a company which otherwise is not even before your good self as can be seen from the perusal of the order dated 22.03.2024, which contains the Joint Memo of parties referred to the arbitration of your good self. Sir, we are aggrieved by the order dated 07.08.2024 and are challenging it before the appellate court. Therefore, we request you not to permit Mr. Rahul Gupta to be present in the arbitration proceedings till the disposal of the appeal. Also, the IA NO. 35767/2024 and 35666/2024 in which the said impugned order is passed is now listed before the Delhi High Court on 03.09.2024. We will be filing our reply to the said IA's and seeking a final disposal. Until then, we request that you please do not permit Mr. Rahul Gupta or the companies he represents to be present in the arbitration proceedings. We seek this indulgence from your good self only in the interest of resolving disputes between both groups, which will be disturbed if Mr. Rahul Gupta is made to be present in every arbitration proceeding. In the alternative, we request your goodself to decide on Mr. Rahul Gupta's request only after giving a due hearing to all the parties as to his presence in the proceedings. Your decision is crucial in this matter and we trust your judgment. Most Respectfully Yours Gautam Dhamija| Advocate 1 Partner, Mimansa Law Offices I C-6/50, Safdarjung Development Area, New Delhi - 110016 I 29, South Avenue, Choube Colony, Raipur, Chhattlsgarh- 492001 C-209, Noida One B-8, Sector-62, Noida, Uttar Pradesh-201309 26.[8] The aforesaid e-mail speaks volumes. It is unthinkable that anyone could write to the learned Arbitrator requesting him not to abide by an order passed by this Court; Kamal Gupta, however, proceeded to do so with blinking the proverbial eyelid. 26.[9] Inasmuch as the entire dispute is in seisin before the learned Arbitrator, this Court does not deem it appropriate to state anything more than to observe that the course of action of Pawan Gupta and Kamal Gupta, particularly, of the latter, give rise to a legitimate apprehension that, in case specific orders, identifying the properties of Rahul Gupta and of Interveners companies, which are to be kept outside the arbitral process, is not made, the interests of Rahul Gupta and the Interveners companies therein are likely to be irreparably prejudiced.

26.10 In the opinion of this Court, this aspect of the matter could not have been overlooked even by Sachin Datta, J., while passing the order dated 22 March 2024. In my opinion, though the facts, in some, though not complete, details, were placed before Sachin Datta, J., his Lordship did not deem it necessary to enter into that labyrinth in view of the apparently fair statements made by Pawan Gupta and Kamal Gupta that the share of Rahul Gupta and the properties of the intervenor companies would not be deal with in arbitration.

26.11 At that time, the Court did not have, with it, the subsequent WP (C) 5691/2024 filed by Kamal Gupta and P P Jewellers, containing assertions contrary to those contained in the reply filed by Kamal Gupta to IA 35676/2024, or the fact that, having made such assertions, Kamal Gupta and P P Jewellers, once again, resiled from their stand before the Court on 24 April 2024 when WP (C) 5691/2024 came up for hearing. Nor did Dutta J have, before him, anything similar to the e-mail dated 16 August 2024, addressed by Kamal Gupta, through counsel, to the learned Arbitrator, astonishingly requesting the learned Arbitrator not to follow the order passed by this Court and to proceed to hear the matter without allowing Rahul Gupta to be present.

26.12 Perhaps as a Freudian slip, Pawan Gupta submitted, before Sachin Datta J, on 22 March 2024 that an arbitration proceeding would be a much speedier way of resolving the dispute as compared to a partition suit. This can also give rise to a legitimate apprehension, in the mind of Rahul Gupta that the entire family properties, which includes 23% share of Rahul Gupta, are sought to be partitioned without involving him in the process.

26.13 The aspect is lent an even murkier hue by certain submissions which have been emailed by Pawan Gupta to the Court Master of this Bench on 11 November 2024, a date before this order was to be pronounced. In the said submissions, Kamal Gupta has sought to contend that the undertaking recorded in para 17 of the order dated 22 March 2024 of Sachin Datta, J. was only in respect of the properties of the intervenor companies, and not in respect of the share of Rahul Gupta.

27. This submission is completely unacceptable. It was specifically argued before Sachin Datta, J. as has been recorded in the order dated 22 March 2024, that the properties of Rahul Gupta and the intervenor companies, which could not be made subject matter of arbitration, as neither Rahul Gupta nor the intervenor companies were parties in either of the FSDs or even in Arbitration Petition 1010/2022. Reliance was also placed, for this purpose, on the judgment of the Supreme Court in Vinod Kumar Sachdeva. Sachin Datta, J. has held the judgment in Vinod Kumar Sachdeva not to be applicable only because the parties before him, i.e. Pawan Gupta and Kamal Gupta were not intending to jeopardise the interests either of the intervenor companies or of Rahul Gupta in the family estate. If the interest of Rahul Gupta in the family estate was to be made subject matter of arbitration, the very reference to arbitration could not have been made, as Rahul Gupta was neither a party to the arbitration petition nor to either of the FSDs. Having, therefore, obtained a reference to arbitration consequent on a premise that they were not interested in dealing with the share or the properties either of Rahul Gupta or of the intervenor companies, neither Pawan Gupta nor Kamal Gupta can now be heard to say that their undertaking was limited only to the properties of the intervenor companies and not to the share of Rahul Gupta. This is a completely unconscionable stand, which has to be rejected on the face of it.

28. Clearly, therefore, the 23% share of Rahul Gupta in the family estate, as well as the properties of the individual intervenor companies have, even by virtue of the undertaking provided by the Pawan Gupta and Kamal Gupta before Sachin Datta, J. as recorded in paras 17 and 18 of the order dated 22 March 2024, to be kept outside the arbitral corpus.

29. This submission of Kamal Gupta lends additional heft to Rahul Gupta’s apprehension that, if his exact share in the properties of the family is not particularized, there is serious risk of its being jeopardized, or at least of an attempt to that end being made.

30. It is for all these reasons that I deem it appropriate, and in the fitness of things as well as the interests of justice, that the exact properties/shares which are to be excluded from the arbitral process, as per paras 17 and 18 of the judgment of Sachin Datta, J., on 22 March 2024, are required to be specified and identified.

31. Insofar as identification of the said properties is concerned, there is no difficulty whatsoever. It is an acknowledged position that, especially in view of the assertions contained in the reply filed by Kamal Gupta to IA 35767/2024 that Rahul Gupta is entitled to 23% of the share in the family property. It goes without saying that this share cannot be restricted to the properties enlisted in Annexure 3 to the 1st FSD, as Rahul Gupta was not a significatory to the said FSD and was excluded altogether from the 2nd FSD. The share of Rahul Gupta would, therefore, encompass 23% of the entire corpus of the family properties. Certain other objections

32. It was sought to be contended that this Bench does not have the jurisdiction to pass this order and that the matter would have necessarily to be referred back to Sachin Datta J. I am in entire agreement with the contention of learned Counsel for Pawan Gupta and Kamal Gupta that I cannot revisit the order of Sachin Datta J. or review or recall the said order.

33. The prayer for recall of the order of Sachin Datta J, as contained in IA 35767/2024 has, therefore, necessarily to be rejected reserving liberty, however, to Rahul Gupta to file a separate application for the said purpose which, if and when filed, would have to be placed before that Bench.

34. The facts and circumstances stated hereinabove, however, clearly require delineation and identification of the properties which are to be excluded from the arbitral process, for a meaningful satisfaction of the undertaking recorded in paras 17 and 18 of the order dated 22 March 2024 passed by Sachin Datta, J. Inasmuch as the properties which form subject matter of the family corpus stand identified in the annexures to both the FSDs, and it is admitted that Rahul Gupta is entitled to 23% of the said properties, it is but natural that 23% of the entire family corpus has to be kept outside the

35. It was also sought to be contended that a referral court, exercising jurisdiction under Section 11 of the 1996 Act, does not frame the terms of reference for the arbitration. This argument, too, has no legs to stand on.

36. The arbitration, which has been instituted at the instance of Pawan Gupta and Kamal Gupta, owes its very identity to the order dated 22 March 2024 passed by Sachin Datta, J. Dehors the said order, neither would the learned Arbitrator have any jurisdiction to proceed with the arbitration, nor would there be any arbitration at all. Neither Pawan Gupta nor Kamal Gupta can, therefore, seek to escape what is contained in the order dated 22 March 2024 of Sachin Datta, J. One of the considerations on which the said order has been passed is the undertaking not to deal with the properties of the intervenor companies or the share of Rahul Gupta. To that extent, therefore, the order dated 22 March 2024 has already identified the peripheries of the arbitral reference. This order does no more than identify the properties, on the basis of admitted facts and admitted pleadings. An observation

37. I am constrained to observe that it was open to the parties to opt for a partition suit, in which case Rahul Gupta would also have been a party, and there would have been no difficulty in partitioning the family properties. That, in fact, would have been the normal course of action to pursue, after including all the affected parties, including Rahul Gupta.

38. For reasons recondite, however, Pawan Gupta and Kamal Gupta have chosen, instead, to seek recourse to arbitration, excluding Rahul Gupta and the intervenor companies from the exercise. They seek to justify the exclusion of Rahul Gupta from the arbitral proceedings on the basis of their undertaking that they would not deal with properties which belong to the share of Rahul Gupta or to the properties belonging to the intervenor companies. The only meaningful way of implementing this undertaking is to exclude, from the arbitration, 23% of all the properties which form part of the PP Jewellers family corpus. Summary

39. The reasons for passing the present order may, therefore, for ease of reference, be summarized as under:

(i) Both the 1st and 2nd

FSDs sought to deal with the admitted and acknowledged 23% share of Rahul Gupta in the family properties without making him a party. The 1st FSD, though it refers to Rahul Gupta as the “third party”, was not signed by him. The 2nd FSD does not even make Rahul Gupta a party. Nonetheless, both the FSDs acknowledged that Rahul Gupta was entitled to 23% share in the entire family corpus.

(ii) Disputes relating to the 1st and 2nd

FSDs, therefore, ordinarily would require Rahul Gupta to be included. However, Pawan Gupta chose to file the present Arb P 1010/2022 without making Rahul Gupta or the intervener companies parties.

(iii) Kamal Gupta, in his reply to the arbitration petition, vociferously opposed the prayer to refer the disputes to arbitration. It was asserted that (a) the FSDs could not be implemented, as they included the 23% share of Rahul Gupta in the family properties, without making Rahul Gupta a party, and (b) Rahul Gupta could not, therefore, be bound by the convenants of the FSDs, including the inclusion of his 23% share in the share of Kamal Gupta as envisaged in the 2nd FSD.

(iv) Thereafter, consequent on Rahul Gupta filing IA

13282/2023 in Arb P 1010/2022 and IA 12227/2023 in OMP (I) (Comm) 198/2023 for intervention in the said proceedings on or around 13 July 2023, the learned Single Judge, before whom OMP (I) (Comm) 198/2023 came up for hearing on the same day, i.e., on 13 July 2023, was informed by Pawan Gupta as well as Kamal Gupta that they had filed a joint memorandum seeking to refer the disputes to arbitration, indicating that Kamal Gupta had executed a complete volte face on the stand adopted by him in the reply filed by way of response to the arbitration petition.

(v) No joint memorandum, filed by Kamal Gupta and Rahul

(vi) The joint memorandum, though dated 13 July 2023 and signed by Kamal Gupta and Rahul Gupta, seeking reference of the disputes to arbitration, came to be filed five days later, on 18 July 2023.

(vii) Thereafter, the order came to be passed by Sachin Datta

(viii) Less than a month thereafter, Kamal Gupta filed WP (C)

5691/2024 before this Court, asserting absolute ownership over the property situated at H-5, Netaji Subhash Place in which, according to Kamal Gupta’s own stand in his reply to the present Arbitration Petition 1010/2022, Rahul Gupta also owned 23%.

(ix) When WP (C) 5691/2024 came up for hearing before the learned Single Judge on 24 April 2024, Kamal Gupta again somersaulted on his stand in the writ petition and stated that he was not claiming ownership rights over the H-5, Netaji Subhash Place property.

(x) Thereafter, despite the order dated 7 August 2024, passed by this Court, permitting Rahul Gupta to be present in the arbitration proceedings, Kamal Gupta addressed an email to the learned Arbitrator on 16 August 2024 requesting the learned Arbitrator not to comply with the order passed by this Court and, therefore, not to permit Rahul Gupta to be present in the

(xi) Thereafter, on 11 November 2024, a day before the present judgment was to be pronounced, Pawan Gupta filed written submissions in the present matter, stating that his undertaking, recorded in para 17 of the order dated 22 March 2024 of Sachin Datta J. was restricted to the properties of the intervener companies and that he had no intention to exclude, from the arbitration, the 23% share of Rahul Gupta.

40. It is obvious that, if Rahul Gupta’s share in the family properties and or the properties of the intervener companies are compromised in the arbitral proceedings, restoration of the status quo would be extremely difficult. It is no panacea to say that Rahul Gupta could battle the issue out in execution. Prevention, even otherwise, is idiomatically always better than cure.

41. It is obvious that, if Pawan Gupta and Kamal Gupta had not agreed not to include, in the arbitral proceedings, the share of Rahul Gupta and the properties of the intervenor companies, the order of Sachin Dutta J may never have come to be passed. Properties of nonparties, it is settled beyond doubt, cannot be compromised in arbitral proceedings. Two parties cannot get together and refer, to arbitration, disputes which, if decided, would jeopardize the properties of a third party who is a stranger to the arbitration. It is in obvious awareness of this position that Pawan Gupta and Kamal Gupta undertook, before this Court, not to deal with the properties of Rahul Gupta and the intervenor companies in the arbitral proceedings.

42. Neither Pawan Gupta nor Kamal Gupta can legitimately oppose to this course of action, as they have themselves persuaded Sachin Datta J to refer the dispute to arbitration on the basis of an undertaking not to include, in the arbitral proceedings, the properties of the intervenor companies or the share of Rahul Gupta.

43. I deem it worthwhile to reiterate, here, that if, as Kamal Gupta now seeks to contend, he had no intention of excluding the share of Rahul Gupta from arbitration, the dispute would become ex facie nonarbitrable, as Rahul Gupta is neither a party to the FSDs nor to the Arbitration Petition. Paras 17 and 18 of the judgment of Sachin Dutta J speak eloquently for themselves. It is clear that, if Sachin Datta J deemed it appropriate to refer the disputes to arbitration, it was only on the assurance that Pawan Gupta and Kamal Gupta would not, between themselves seek arbitration of the rights of the intervenor companies, or of Rahul Gupta, behind their back.

44. This court is, therefore, clear that there can be no question of the interest or share of Rahul Gupta, or the properties of the intervenor companies, being made subject matter of the arbitration, as neither Rahul Gupta, nor the intervenor companies, were parties either to the FSDs or to the Arbitration Petition. Rahul Gupta, admittedly, is entitled to 23% share in the entire family corpus. This 23% share cannot, therefore, be subjected to arbitration. This Court deems it necessary to state this position, so that no occasion arises for Rahul Gupta, or the intervenor companies, to apprehend that the undertaking and assurance on which this Court proceeded on 22 March 2024, may be breached.

45. Beyond this, however, the prayers of Rahul Gupta, in these applications – except the prayer for being permitted to be present in the arbitral proceedings – travel far beyond the remit of this Court, and cannot be granted. Conclusion

46. In view and in continuation of the above discussion, these applications are, therefore, disposed of in the following terms:

(i) The prayer, in IA 39500/2024, for recall of the order dated 22 March 2024, is rejected, as I am in agreement with learned Counsel for Pawan Gupta and Kamal Gupta that I cannot recall or review an order passed by a coordinate Bench.

(ii) The right of Rahul Gupta to remain present in all future proceedings in the arbitration, as well as other directions contained in the order dated 7 August 2024 passed by this Court in IA 35767/2024 are made absolute, pending disposal of the

(iii) The properties enlisted in Annexure A below, which belongs to the intervenor companies, and 23% of all the properties enlisted in Annexure B below, which constitute Rahul Gupta’s share in the total family corpus, shall remain outside the arbitration. The arbitral proceedings, qua the properties in Annexure B shall, therefore, be limited to 77% thereof16. Annexure A* Annexures A and B are taken from submissions filed by Rahul Gupta before this Court, and correspond with the list of family properties as annexed to the FSDs. Though the entire corpus may be more, Rahul Gupta has asserted his right only with respect to Annexures A and B. S.No. Particulars of properties Owner

1. H-5, Netaji Subhash Place, Pitampura- Delhi LR Builder Pvt Ltd

2. Plot No. 2, CC, Sector 3 Rohini LR Builder Pvt Ltd

3. Khasra No. 28 / 15 / 1, 28/6, measuring 4805 sq. yards bearing Municipal No. B-29-24,G.T.Road, Sherpur Chowk, Ludhiana)

4. C-1, 2, 3, NSP, District Centre, Wazirpur

5. 83/31, East Park Road Purnima Associates Pvt Ltd

6. Khasra No. 1368 to 1373 and 1380, Quadipur Purnima Buildmart Pvt Ltd

7. Khasra No. 43, 15/2, 16/1, 44, 19/2, MG Buildmart Pvt Ltd Annexure-B*

1. 2700, DBG Road, Showroom Pawan Gupta Group PPJewellers Private Limited Akash Nirman Udyog Pvt. Ltd. Manficiient Overseas Pvt. ltd. Mangalam Developers Pvt. Ltd.

2. A-19, Block 9A, Jasola Vihar Pawan Gupta Group Pawan Gupta

3. Flat No 89, Lok Vihar at Vikaspuri Pawan Gupta Group Renu Gupta

4. Khasra No 26/8, 9, 13/23, 26/2, 4, agricultural land in Daulatpur, Najafgarh Kamal Gupta Group Appy Apparels Pvt Ltd

5. Khasra No 71//10/3, 11/1, 20/2, 21/1, 72//15/2, 16/1. 25/2, 6/2 in Vill Dhansa, Najafgarh Kamal Gupta Group Gardenia Agro Pvt Ltd

6. Khasra No 503, 511, 523, 530, 540, Jaffarpur Kalan, Najafgarh Kamal Gupta Group Luxury Apparels Pvt Ltd

7. Gali No.2-2681/83A & 2547, Beadonpura – Karol Bagh Kamal Gupta Group Mukesh Gupta

8. 1178, Kucha Mahajani & 420, Haider Ali, Kamal Gupta Group Kamal Gupta 20, 21, 22, 48, 1/2, 9/2, 10/1, 11/1, 11/2, 49, 4/1, 5, Alipur

8. Khasra no. 12, 13/1, 2/2, 3/1, 8, 9, Daulatpur PG Colonisers Pvt Ltd

9. C-12/4, Rana Pratap Bagh PV Buildmart Pvt Ltd

10. 113 Park Street, Kolkata Glow Jewellery Pvt Ltd and P.Sen Engineering Pvt Ltd

11. Property at Village Rawta, New Delhi P Sen Technical Services Pvt. Ltd. Chandani Chowk

9. 4262-4265, Gali Bharon Wali, Jogiwara Nai Sarak Kamal Gupta Group Veekay Exim Private Limited

10. Kolkata Office @ 7th Floor, Metro Towers Office Complex, 1, Ho Chi Minh Sarani Limited

11. Paragati Sheel Appt. Sector 9, Rohini Kamal Gupta Group Govind Gupta, Kamal Gupta, Pawan Gupta

12. 2129-2130, Gurudwara Road, Karol Bagh -old (58.33%) Kamal Gupta Group Veena Gupta 13 8A, Metro Towers, Kolkata Limited 14 415A/3, Ram Leela Ground, Gurgaon Kamal Gupta Group Appy Diamonds Private Limited 15 16/2699, Naiwala/DBG Road, Karol Bagh Kamal Gupta Group Akash Nirman Private Limited 16 R-2, Green Park Kamal Gupta Group KSD Properties 17 Plot No.5, Lajpat Nagar Kamal Gupta Group Mohit Gupta

18 Plot No. 88A, Sector 16, HSIIDC, Vill Jakhoda Kassar, Bahadurgarh Kamal Gupta Group Shree Shiv Jewellers Shree Vishnu Jewellers 19 674-675, Sadar Bazar Kamal Gupta Group Pawan Gupta 20 90, Model Town Kamal Gupta Group Pradeep Gupta COMMON PROPERTIES 21 57, Burtala Street, Kolkata 22 Plot No.4, C-8, Rana Pratap Bagh Veena Gupta 23 C-19, Rana Pratap Bagh Veena Gupta 24 Stocks of PP Jewellers Delhi P.P.Jewellers Delhi

25 Stocks of PP Jewellers Exports P.P.Jewellers Exports 26 Stocks of PP Jewellers Pvt Ltd P.P.Jewellers Pvt. Ltd. * Details of the properties have been taken from the pleadings (particularly in the OMP) and the records read with the FSDs and the annexures thereto, omitting properties for which no details are forthcoming.

(iv) In respect of any remaining properties, if there is any legal restraint in dealing with the properties, it shall be open to the parties, including Rahul Gupta, to bring it to the notice of the learned Arbitrator, who shall take a call thereon.

C. HARI SHANKAR, J.