Manju Gupta v. Meenu Singhal

1. This petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) praying for the following relief:- “a. allow the present petition and appoint the Hon’ble Mr. Justice C.M. Nayyar (Former Judge of this Hon’ble Court) as an arbitrator to adjudicate the disputes between the parties by making the reference of the disputes under Section 11 of the Arbitration & Conciliation Act, in view of the fact that this Hon’ble Court vide its judgment and order dated 22.1.2021, appointed Justice C.M. Nayyar as sole arbitrator to adjudicate the disputes between the other signatories of the MFS and the petitioners, to which the respondents are also the signatories.”

2. It is the case of the petitioners that before filing of the present petition, the petitioners had invoked the Arbitration Agreement between the parties as is contained in the ‘Memorandum Recording Family Settlement’ dated 28.04.2007 (hereinafter referred to as the ‘Family Settlement’), inter alia, against the husband/father of the respondents- Shri Pawan Singhal, vide notice dated 03.03.2020. On failure of the parties agreeing to the appointment of the Arbitrator, the petitioners had filed a petition under Section 11 of the Act, being ARB.P. 331/2020 titled Smt. Manju Gupta & Ors. v. Shri Vilas Gupta & Ors. The said petition was allowed by a Coordinate Bench of this Court vide order dated 22.01.2021, appointing Mr. Justice C.M. Nayar (Retd.) as an Arbitrator.

3. In the Statement of Claim filed before the learned Arbitrator, the petitioners impleaded the respondents herein, who are the wife and children of Shri Pawan Singhal, who had been impleaded as respondent no.4 in the earlier petition. An objection to such impleadment was raised by the respondents by filing an application under Order I Rule 10 of the Code of Civil Procedure, 1908 (in short ‘CPC’). The said application has been allowed by the learned Sole Arbitrator vide order dated 24.11.2021, keeping in view that neither in the notice dated 03.03.2020 invoking arbitration nor in the petition filed under Section 11 of the Act, the respondents herein had been impleaded as parties.

4. Faced with this situation, the petitioners issued a notice dated 07.12.2021 to the respondents again invoking the Arbitration Agreement between the parties as contained in the ‘Family Settlement’.

5. The respondents vide their response dated 07.01.2022 refused the appointment of an Arbitrator, inter alia, raising the issue of the claims being barred by limitation; the claims raised being not arbitrable; and the claims being without merit. The petitioners thereafter have filed the present petition.

6. The learned counsel for the petitioners, placing reliance on the order dated 22.01.2021 passed in ARB.P. 331/2020 (supra), submits that this Court has already appointed an Arbitrator to adjudicate the disputes that have arisen between the parties in relation to the Family Settlement. He submits that in the Family Settlement, the husband/father of the respondents, Shri Pawan Singhal along with the respondents, formed ‘The Fourth Part’ and in turn ‘Group-I’. The respondents were represented through their husband/father Shri Pawan Singhal. Based on the advice received, the earlier notice invoking arbitration was sent only to Shri Pawan Singhal. It is only when the respondents raised their objections before the learned Arbitrator appointed by this Court, that the petitioners realized their mistake and invoked the Arbitration Agreement over again by the notice of 07.12.2021.

7. He further submits that before invoking arbitration, the petitioners had tried to settle the disputes that had arisen with respect to the Family Settlement with the respondents through their husband/father and, therefore, it cannot be said that the claims raised by the petitioners are barred by limitation. In support, he places reliance on the judgment of the Supreme Court in Hari Shankar Singhania and Others v. Gaur Hari Singhania and Others, (2006) 4 SCC 658.

8. He further submits that in any event, these are issues which have to be left to be determined by the learned Arbitrator, and this Court should not enter into such disputed questions of fact at this stage.

9. On the other hand, the learned senior counsel for the respondents submits that mere vague pleadings of the parties having earlier tried to settle the disputes, cannot be a ground for making the claims fall within the period of limitation. The petitioners are under an obligation to give the entire negotiation history before taking any benefit of extension of the period of limitation. In support, he places reliance on the judgment of the Supreme Court in Geo Miller and Company Pvt. Ltd. v. Chairman, Rajasthan Vidyut Utpadan Nigam Limited, (2020) 14 SCC 643.

10. He submits that in the present case, one of the named Arbitrators in the Family Settlement had tendered his resignation on 21.08.2007 from acting as an Arbitrator. The cause of action for seeking appointment of a substitute Arbitrator, if any, arose on that date. The earlier arbitration notice having been sent only on 03.03.2020, and that too, not to the respondents herein, and the notice invoking arbitration being sent to the respondents only on 07.12.2021, the same is clearly and hopelessly barred by limitation. In support, he places reliance on the judgments of this Court in Tarun Kr. Jain, Sole Proprietor v. M.C.D., ILR (2011) IV Delhi 530 and Tricolor Hotels Limited & Ors v. Dinesh Jain & Ors, 2022/DHC/004716.

11. The learned senior counsel for the respondents further submits that the petitioners are also not entitled to seek any benefit of the proceedings pending before the learned Company Law Board and/or before this Court, as these proceedings were not initiated by the petitioners. Be that as it may, even the proceedings before the learned Company Law Board had terminated on 20.08.2014. There was no embargo on the petitioners to at least, at that stage, invoke the Arbitration Agreement, if they were entitled to do so.

12. The learned senior counsel for the respondents further submits that by way of the Family Settlement, the parties had intended to refer their disputes in relation to the Family Settlement only to the named Arbitrators. The named Arbitrators were selected as they were also present at the time of the entering into the Family Settlement and were witnesses thereto. They were named for their personal qualifications and involvement in the Family Settlement and the trust imposed on them. He submits that such Arbitrators, in case they express their inability or are otherwise not available, cannot be substituted by this Court.

13. He further submits that the petitioners having already invoked the Arbitration Agreement vide notice dated 03.03.2020 without impleading the respondents herein, the dispute raised by the petitioners would be barred by the principles of Order II Rule 2 of the CPC.

14. He further submits that reliance placed by the learned counsel for the petitioners on the order dated 22.01.2022 of this Court in ARB.P. 331/2020 (supra) is mis-placed inasmuch as this Court had not considered the plea of limitation in the said order.

15. I have considered the submissions made by the learned counsels for the parties. The Family Settlement defines the Fourth Part thereto as under:- “(4) Shri Pawan Singhal Son of Shri G.R. Singhal and Smt. Meenu Singhal Wife of Shri Pawan Singhal both residing at 39 Paschimi Marg, Vasant Vihar, New Delhi – 110057 together with Minor Daughter Ms Shreya Singhal and Minor Son Master Shaishav Singhal, both represented by their father Shri Pawan Singhal (hereinafter jointly referred to as parties OF THE FOURTH PART).”