Rahul Jain v. Atul Jain

Jain, the arbitrator named in Clause 19.18.2.10 He referred to the MOFS and requested the arbitrator to convene the arbitration proceedings at the earliest so that the MOFS is executed without delay.

Ananya and Asha Lata responded to the letter dated 05.08.2017, raising various objections to appearing before the arbitrator.15 They noted that the arbitrator’s communication neither discloses who has appointed him as the arbitrator nor the identity of the claimant and the nature of the claims. They also stated that the arbitrator himself had sent two legal notices to Atul, Meenakshi, Apoorv, and two of the family’s business concerns (M/s Charming Apparels Pvt. Ltd. and M/s Charming Obsession) demanding various sums, and filed a complaint in the police The arbitrator’s letter dated 05.08.2017 to all the parties herein at document-4 of the petitioners’ list of documents. Atul’s letter dated 10.08.2017 in response to the arbitrator’s letter dated 05.08.2017 at document-5(colly) of the petitioners’ list of documents. Meenakshi, Apoorv, Ananya, and Asha Lata’s letters dated 10.08.2017 in response to the arbitrator’s letter dated 05.08.2017 at document-5(colly) of the petitioners’ list of documents. station. They, therefore, disputed his ability to act fairly and impartially.

11. The present petition was filed by Rahul, Nipur, Aastha and Aviral on 23.08.2017. In the course of proceedings, parties were also referred to mediation, which has regrettably been unsuccessful.20

12. There is also reference in the documents on record to the following civil proceedings instituted by the family members:a. Apoorv has filed CS(OS) 612/2016 in this Court against Rahul and Nipur, principally claiming partition of property No. H-27- C, Sainik Farms, New Delhi. In this suit, it is an admitted position that the petitioners herein filed I.A. No. 6898/2017, under Sections 5 and 8 of the Act, which was dismissed on 30.05.2017. This order is discussed in greater detail later in this judgment. b. Apoorv has also placed certain documents on record to show that he has filed CS(OS) 136/2019 seeking a declaration that the MOFS is illegal, as also possession and injunction in respect of property No. 409-412, Ward No. V, Katra Chauban, Chandni Chowk, Delhi-110006.21 c. Poonam, who has sought to intervene in this petition, has placed on record a copy of a suit filed by her [CS (OS) 79/2018] against all the parties in this petition, as well as her sister Order of this Court dated 14.05.2019 in the present petition. Apoorv’s plaint in CS(OS) 136/2019 at document-1 of Apoorv’s list of documents. Alka.22 In this suit, she claims a declaration that the MOFS and any action taken pursuant thereto is null and void and partition of the assets of the R.C. Jain (HUF) and of the personal assets of late Mr. R.C. Jain.

13. I have heard Mr. Ratan Kumar Singh, learned Senior Counsel for the petitioners, in support of the petition. Mr. Ankit Jain, learned counsel for Apoorv, Ms. Padma Priya, learned counsel for Poonam, Mr. Jai Sahai Endlaw, learned counsel for Asha Lata, and Mr. Tanmaya Mehta, learned counsel for Atul, Meenakshi and Ananya, have made their submissions opposing the petition. Learned counsel for the parties have also cited several authorities in support of their arguments. The relevant authorities will be cited and discussed while dealing with the arguments in question.

14. In the opening arguments, the principal submissions of Mr. Singh were as follows: -

Court is only required to come to a prima facie finding with regard to the existence of an arbitration clause. That requirement is clearly fulfilled in the present case.

15. Learned counsel for the respondents took the following common objections to the appointment of an arbitrator in the present case: -

R.C. Jain (HUF), it is submitted that it required the assent of all members of the HUF, which it admittedly did not have.

16. In addition to these arguments, Mr. Jain, learned counsel for Apoorv, emphasized that Apoorv is ex facie not a party to the MOFS as it does not bear his signature. He submitted that the petitioners have suppressed the order of this Court dated 30.05.2017 in CS(OS) 612/2016 whereby this Court has noticed the absence of a valid arbitration agreement, as against him. Mr. Jain contended that the petitioners’ failure to disclose the fact that their application under Section 8 of the Act had been dismissed vide order dated 30.05.2017, and to place a copy of the order before the Court in this petition, renders the petition liable to be dismissed on the ground of suppression of material facts.

17. Mr. Mehta, learned counsel for Atul, Meenakshi and Ananya, submitted that Clause 19.18.[2] of the MOFS26 contemplates arbitration only by the named arbitrator and in the event of the named arbitrator being unable to act, it ought not to be presumed that the parties intended to go to arbitration. He submitted that, particularly in the context of a family settlement, parties may repose their trust in a Extracted in paragraph 9 of this judgment. particular named individual without intending generally to bind themselves to resolution of disputes by arbitration.

18. Mr. Endlaw’s submissions, on behalf of Asha Lata, centered around allegations of fraud and misrepresentation surrounding Asha Lata’s signature on the MOFS document. He submitted that Asha Lata was made to believe that she was signing the document in the capacity of a witness to certain business arrangements or settlements between her sons. He contends that she was not informed, at any stage, of any disposition of her own assets by virtue of the said document. She claims to have been advised of the contents of the MOFS only by Mr. Ravi Jain, who is one of her close associates and was a proposed witness to the document. It is submitted that Mr. Ravi Jain apprised her of the contents when it was brought to him for attestation. Mr. Endlaw pointed out that, although Mr. Ravi Jain’s name appears as one of the witnesses, the MOFS does not bear his signature.

19. Ms. Padma Priya submitted on behalf of Poonam that she was never informed about the execution of the MOFS, and her consent was not obtained, despite the fact that she is entitled to a share, both in properties of the R.C. Jain (HUF) and in the personal assets of her late father. She has consequently filed CS(OS) 79/2018 before this Court in which the existence and validity of the MOFS has been squarely challenged, and interim orders passed with respect to the HUF assets, as well as the estate of late Mr. R.C. Jain.27 This Court’s order dated 23.02.2018 at Document-1 annexed to the intervenor’s application to intervene in the present petition.

20. In rejoinder, Mr. Singh reiterated the contents of his opening submissions. He also submitted that the opposition to the MOFS and the appointment of an arbitrator has been orchestrated by Atul, roping in his wife and children, as well as Asha Lata. He submits that Asha Lata’s allegations of fraud, directed both against Rahul and Atul, are belied by the fact that she has, subsequent to the MOFS, executed a gift deed of her immovable property in favour of Atul’s son, Apoorv. He submitted that the respondents’ arguments tend to embroil this Court in a mini-trial at the stage of proceedings under Section 11 of the Act, which is not permissible.

21. With regard to the position of Apoorv, Mr. Singh submitted that multi-party arbitrations involving some parties who are signatories to the agreement, and some who are not, are known to law and do not invalidate the arbitration agreement. He submitted that Apoorv has not only taken advantage of the MOFS, but has also failed to challenge the authority of his father to enter into the MOFS on his behalf, in any properly constituted proceedings.

22. Mr. Singh contended that the position of Poonam and Alka is secured by the MOFS clauses providing for their consent (Clause 6). In any event, he conceded in arguments that the petitioners are willing to give up any claim for reference to arbitration in respect of the HUF properties in which the sisters have a share.

23. With reference to the order of this Court dated 30.05.2017, Mr. Singh submitted that a holistic reading of the order shows that it was predicated only upon the question of delay in making of the application and the aforesaid ground would not apply under Section 11 of the Act. He submitted that the petitioners ought not to be blamed for their failure to place the order on record which was, in fact, the responsibility of their erstwhile counsel.

24. On the question of invocation of the arbitration clause, Mr. Singh submitted that the validity of the invocation can also be decided by the arbitrator. He submitted that the communication dated 26.11.2016 from Rahul to the named arbitrator, and subsequent communications of the arbitrator dated 16.12.2016 and 05.08.2017 were sufficient to satisfy the requirements of a valid invocation, particularly in the context of a family settlement. Mr. Singh argued that a particularisation of the claims is not required in the letter of invocation.

1. Scope of proceedings

25. While dealing with the present petition under Section 11 of the Act, the scope of the Court’s jurisdiction is limited. If the Court is prima facie satisfied about the existence of an arbitration agreement between the parties, that disputes have emerged which require adjudication, that the arbitration clause has been duly invoked, and that the agreed procedure for constitution of the arbitral tribunal has failed, the Court would normally appoint an arbitrator. However, narrow exceptions to this principle have been carved out, as explained in the recent judgments of the Supreme Court, inter alia in Vidya Drolia & Ors. vs. Durga Trading Corporation28, Bharat Sanchar Nigam Limited & Anr. vs. Nortel Networks India Private Limited29, and DLF Home Developers Limited vs. Rajapura Homes (P) Ltd.30 The Court’s emphasis has been on permitting parties to resolve their differences through the agreed mechanism of arbitration. This includes reference of questions as to the arbitrability of disputes, as recently reiterated in VGP Marine Kingdom Pvt. Ltd. & Anr. vs. Kay Ellen Arnold31. However, the Court may decline reference if the disputes fall in the admittedly narrow exceptions as discussed in these judgments.

26. In the present case, learned counsel for the respondents have raised various objections as to the existence and validity of the arbitration clause, as well as with regard to the implementation of the purported settlement reflected in the MOFS. They have submitted that the arbitration proceedings, in the present case, would be futile as the disputes are within the category of “deadwood”. They have alleged that, at least as far as Asha Lata is concerned, the agreement is born out of fraud and undue influence; that Apoorv is not a party to the MOFS at all; that the disputes cannot be resolved in the absence of various necessary parties (including Poonam and Alka, as well as various companies and other business entities); and that the substratum of the agreement in the form of various assets have disappeared.

27. Although the arguments as noted above have cover a wide canvas, I am of the view that the present petition can be disposed of on relatively narrow grounds. The first relates to the validity of the purported invocation of arbitration by the petitioners. While this affects all the respondents, including Apoorv, I propose also to deal with the specific contention regarding his status viś-a-viś the arbitration agreement, as a serious allegation of suppression has been made against the petitioners in this connection.

2. Validity of invocation

28. As far as all the respondents are concerned, a ground which goes to the root of the matter concerns the invocation of the arbitration clause. The judgment of the Supreme Court in Nortel32 indicates that a proper invocation is mandatory: -

29. The purpose behind such a provision has been laid down by this Court in Alupro Building Systems Pvt. Ltd. vs. Ozone Overseas Pvt. Ltd.34 in the following terms: -

30. This view has also been followed in subsequent judgments of this Court in Active Media vs. Divisional Commercial Manager, Northern Railway35, Badri Singh Vinimay Pvt. Ltd. vs. MMTC Ltd.36, and Bharat Chugh vs. MC Agrawal HUF.37 I have also had occasion to consider these decisions in a judgment delivered on 15.11.2022.38

31. Applying these principles to the present case, the chain of correspondence outlined in paragraph 10 hereinabove, does not fulfil

Anil Goel vs. Satish Goel; judgment dated 15.11.2022 in ARB.P. 683/2015 [Neutral Citation Number: 2022/DHC/004826]. the conditions of a valid invocation of the arbitration clause as the alleged parties to the arbitration agreement were not put on notice thereof. The arbitration before Mr. Abhay Kumar Jain purportedly commenced with a communication dated 26.11.2016 addressed by Rahul to him alone. In the said communication, Rahul referred to the MOFS and the appointment of Mr. Abhay Kumar Jain as the arbitrator thereunder and requested him to convene the arbitration proceedings at the earliest so that the MOFS is executed without any delay. The communication was not addressed to the other parties to the MOFS at all. It appears from the arbitrator’s response to Rahul dated 16.12.2016 that the arbitrator, in fact, recognised these deficiencies. He suggested that Rahul should “first issue Notice to other parties to the MOS and accordingly, make the appropriate reference in accordance with law”.39 Although this letter was copied to Atul and Asha Lata, it was not addressed to any other party to the MOFS. Despite this communication of the arbitrator, it is undisputed that Rahul did not, in fact, issue notice to any other party to the MOFS or take any action pursuant thereto. Although the arbitrator nevertheless called for a meeting on 23.12.2016 and subsequently on 12.08.2017, as noted above, the respondents objected to the proceedings. Consequently, the arbitrator withdrew from arbitration by an order dated 12.08.2017. Parties other than Rahul, Atul and Asha Lata thus had no notice of the proceedings until the arbitrator’s communication dated 05.08.2017, by which he merely fixed an adjourned date of hearing of the arbitration. Extracted in paragraph 10(B) above.

32. Although the Court in a family settlement is obliged to take a pragmatic view in support of enforcing the agreement, and not to rely upon technicalities, having regard to the considerations emphasised in Alupro40, the requirement of a proper invocation of the arbitration clause cannot be characterized as a mere technicality. The principle iterated by the Supreme Court in Kale & Ors. vs. Deputy Director of Consolidation and Ors. 41 is based upon the value in settling and resolving conflicting claims within a family so as to bring about peace and harmony between the parties. This is not inconsistent with the purposes of a proper invocation of the arbitration clause to put the concerned persons on notice regarding the potential proceedings against them. In many cases, it also serves the important purpose of inviting them to participate in the due constitution of the arbitral tribunal in the manner contemplated under the agreement, without which the claimant cannot initiate proceedings under Section 11 of the Act.

33. On the point of invocation, Mr. Singh referred me to a judgment of a Single Judge of the Bombay High Court in Malvika Rajnikant Mehta v. JESS Construction42 wherein the High Court inter alia cited the judgment of this Court in Alupro43 and came to the conclusion that there was a factual controversy as to whether the communication of the claimant to the named arbitrator was addressed to the other parties, so as to constitute a proper invocation of the arbitration clause under Supra (note 34).

Section 21 of the Act. In view of this factual dispute, the Court appointed the arbitrator and referred the question of proper invocation also to the arbitrator for consideration, expressly “in the peculiar facts of the case”.44

34. The present case, in contrast, does not raise any controversy as to whether the letter of invocation sent by Rahul to Mr. Abhay Kumar Jain was served upon the other parties to the MOFS. There is no suggestion that it was so served, so as to raise a factual controversy requiring determination by the learned arbitrator. The judgment in Malvika Rajnikant Mehta45 is, therefore, inapplicable to the facts of the present case.

35. Mr. Endlaw placed reliance upon a judgment of the Bombay High Court in D.P. Construction vs. Vishvaraj Environment (P) Ltd.46, wherein the High Court has relied upon Nortel47 and the judgment of this Court in Alupro48 to come to the following conclusions: -

36. It may be noted that the judgment in Malvika Rajnikant Mehta50 has also been considered by the same Court in D.P. Construction51 as extracted above.

37. Mr. Singh sought to argue that these considerations would be inapplicable to the present case where the arbitration proceedings had already been commenced before the named arbitrator. He pointed out that the present petition has been necessitated by the arbitrator withdrawing from the arbitration proceedings. Relying upon the judgments in Cinevistaas Ltd. vs. Prasar Bharti52 and Enarch Consultant Pvt. Ltd. vs. Lalji Superspecialty Hospital & Research53, he submitted that the present petition itself ought to be treated as a petition under Section 14 and 15 of the Act, and a substitute arbitrator be appointed in place of Mr. Abhay Kumar Jain.

38. I am of the view that this course would also be inappropriate in the present case, when the purported arbitration proceedings before Mr. Abhay Kumar Jain were themselves not properly instituted. In the absence of invocation of the arbitration clause, for the reasons stated above, arbitration proceedings, in terms of Section 21 of the Act, had not commenced. There was also no substantive proceeding before the arbitrator at all. Supra (note 42). Supra (note 46).

39. For the aforesaid reasons, I am of the view that the arbitration proceedings were not properly invoked in terms of Section 21 of the Act, which disentitles the petitioners to relief under Section 11 of the Act.

3. Reference to arbitration qua Apoorv

40. Apoorv admittedly did not sign the MOFS himself. His impleadment as a party to this petition and to the proposed arbitration proceedings is sought to be justified on the ground that the MOFS was signed by Atul on behalf of other members of his family, including Meenakshi, Ananya and Apoorv. In the course of arguments, Mr. Singh emphasised that at the time of signing of the MOFS, Apoorv was a young man of approximately 24 years of age and was a student overseas. He relied upon various decisions, including the celebrated decision of the Supreme Court in Kale54, and Korukonda Chalapathi Rao & Anr. vs. Korukonda Annapurna Sampath Kumar55 to urge the Court to jettison technical objections in favour of upholding and implementing a family settlement. He submitted, relying upon the decision of this Court in Vijay Kumar Munjal & Ors. vs. Pawal Munjal & Ors.56, that at least for the prima facie finding required in these proceedings, Atul’s assertion that he was authorised to sign the MOFS on behalf of his son is satisfactory for a reference to be made. Mr. Singh also drew my attention to the written statement filed by Atul and Nipur in the civil suit filed by Apoorv to contend that Supra (note 41).

Apoorv has, in fact, taken the benefit of the MOFS and cannot now resile from its terms, including as to the resolution of disputes.

41. In this connection, it may be noted that the description of the parties in the opening part of the MOFS refers to Atul and Rahul as representing themselves and the other named individuals, being their respective wives and children. However, it also states that all the individuals “have appended their signatures to this memorandum as concurrence thereof”. The undisputed fact is that Apoorv has not appended his signature to the MOFS and, notwithstanding any arguments as to the actual or ostensible authority of his father to sign the document on his behalf, no assumption of his concurrence can be made in view of the specific stipulation that the signature of each of the parties would be appended to signify their concurrence.

42. Mr. Jain drew my attention to another significant development in connection with Apoorv’s amenability to arbitration. He submitted that the petitioners have concealed from the Court the order dated 30.05.2017 by which an application made by Rahul and Nipur under Section 8 of the Act was dismissed. He submitted that a status quo order was granted in favour of Apoorv in the said suit, which continues to subsist. Mr. Jain argued that, after the unchallenged dismissal of the application under Section 8 of the Act, the proceedings in the suit are liable to continue to their logical conclusion.

43. Apoorv’s suit was filed on 06.12.2016 and pertains to the Sainik Farms property, which, according to the petitioners herein, has been allocated to the share of Rahul in the MOFS. The title documents are, however, in the name of Rahul and Apoorv. The plaint has been placed on record by Apoorv, in which he clearly asserts that he has neither dealt with the property nor authorised anyone else to do so. In the written statement filed by Rahul and Nipur on 27.01.2017, reference was made to the MOFS but not to the arbitration clause. Four months thereafter, they filed an application under Section 8 of the Act, which came to be dismissed on 30.05.2017.

44. The order dated 30.05.2017 reads as follows: - “This is an application filed by the defendant under Sections 5 and 8 of the Arbitration Act. This Court is not inclined to issue notice on this application. Record shows that the present suit is a suit for partition which has been filed by the plaintiff against the defendants. The suit had been filed on 06.12.2016. There are two defendants. Both had been served. A common written statement had been filed by them. This is dated 27.01.2017. Admittedly in this written statement, there is no mention of any arbitration clause contained in any agreement inter-se the parties. The written statement runs into several pages but the entire body of the written statement shows that no claim had been set up by the defendant seeking arbitration qua the present proceedings. This has also been admitted by the defendants. Present application has been premised on the submission of the defendants that Section 8 (3) is independent of Section 8 (1) of the said Act. His submission is that if an arbitration proceeding is pending, the same must reach its ultimate goal and the suit which has been filed (as is in the present case) cannot continue. To elucidate his submission, learned counsel for the defendants has placed reliance upon a letter purported to have been written by the alleged Arbitrator Abhay Kumar Jain (dated 16.12.2016) to the defendants asking the parties to appear before him on 23.12.2016. Learned counsel for the defendants submits that on 23.12.2016, since none had appeared before Abhay Kumar Jain (the alleged Arbitrator), proceedings did not continue. Meanwhile, this suit had been filed on 06.12.2016 and the written statement was also filed. At the cost of repetition, the submission now set up by the defendants is that the matter should have in fact been referred to arbitration was never taken as a defence. Learned counsel for the defendants in support of his application has placed reliance upon an arbitration clause which as per him is contained in a memorandum of a family settlement dated 23.07.2016. This memorandum of family settlement as per the defendants is dated 23.07.2016. There is no mention of any such family settlement dated 23.07.2016 in the present proceedings. A valid arbitration agreement is a pre requisite to entertain an application under Section 8 of the said Act. This is clearly missing. That apart this Court is wholly unable to understand how the provisions of Section 8 (3) of the said Act which reads herein as under:- "(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. " would come to the aid of the defendants. The non-obstante clause states that notwithstanding any application having been made under Section 8 (1), the arbitration may be commenced or continued and an arbitral award be made. At the cost of repetition, the memorandum of family settlement dated 23.07.2016 (sought to be relied upon by the defendants) is nowhere a part of the plaint; written statement having been filed long back i.e. in January, 2017 and no plea having been set up that there was an arbitration clause in a memorandum of a family settlement and the matter be referred to arbitration, this application filed at this stage is nothing but an abuse of the process of the Court. This Court is of the view that this application has been filed only to de-rail the proceedings. Application is mala fide and without any merit. Dismissed with costs quantified at Rs.25,000/.”57

45. Mr. Singh sought to explain this order by arguing that it was only on the ground of delay in filing of the application that the Court declined reference to arbitration. He cited the judgment of a learned Single Judge of Calcutta High Court in TRL Krosaki Refractories Ltd. vs. Lindsay International Pvt. Ltd.58 to contend that the appointment of an arbitrator, under Section 11 of the Act, is not precluded by dismissal of an application under Section 8 of the Act in a civil suit. He submitted that the Supreme Court declined special leave to appeal Judgment dated 22.01.2019 in A.P. No. 969 of 2017. against this judgment59 and also dismissed a review petition60 and a curative petition61 filed against the said judgment.

46. Mr. Singh’s argument in this regard does not commend to me. The order of the Court is based not just upon the stage of proceedings at which the application was filed, or the lack of any pleading regarding the arbitration agreement in the written statement, but also upon a clear finding that there is no valid arbitration agreement between the parties to the suit. The Court finds the pre-requisite of a valid arbitration agreement between the parties to be missing. The order was not challenged, and the suit remains pending. The finding regarding lack of an arbitration agreement, at least as against Apoorv, cannot be wished away by the petitioners. It is binding upon the parties, as indeed upon this Court. I am of the view that this legal position renders the other arguments of Mr. Singh regarding Apoorv’s amenability to arbitration futile. The order dated 30.05.2017 is conclusive, as far as existence of an arbitration agreement qua Apoorv is concerned. It is, therefore, not necessary to consider Mr. Singh’s submission regarding the proper interpretation of the MOFS in the context of its character as a family settlement.

47. I also note that in the petitioners’ rejoinder to Apoorv’s reply to this petition, the petitioners have not proceeded on the basis now urged by Mr. Singh, but expressly averred that the Court dismissed the application “on a hyper-technical point that the Application was filed Order dated 15.02.2019 in SLP (C) No. 4285/2019. Order dated 23.04.2019 in Review Petition (Civil) No. 864/2019. Order dated 04.03.2020 in Curative Petition (C) No. 398/2019. at a belated stage”.62 It is suggested that the failure of the defendants therein to file the application alongwith the written statement was due to an error of counsel and ought not to prejudice the petitioners’ hearing. In similar vein, answering the allegation of suppression, Mr. Singh submits that the petitioners ought not to be prejudiced by counsel’s failure to place the order dated 30.05.2017 before this Court alongwith the present petition.

48. I am unable to agree with Mr. Singh’s contentions in this regard. Two judgments cited by Mr. Jain clearly render a litigant liable for the consequences of suppression of material facts. In S.P. Chengalvaraya Naidu vs. Jagannath & Ors.63, the Supreme Court held as follows: -

5. The High Court, in our view, fell into patent error. The short question before the High Court was whether in the facts and circumstances of this case, Jagannath obtained the preliminary decree by playing fraud on the court. The High Court, however, went haywire and made observations which are wholly perverse. We do not agree with the High Court that “there is no legal duty cast upon the plaintiff to come to court with a true case and prove it by true evidence”. The principle of “finality of litigation” cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation.”64 Similarly, this Court in Satnam Chand Kohli vs. Ashwinder Kumar ETC65 followed the view taken by the Supreme Court in the above judgment and dismissed a suit on the ground of abuse of process. The following observations of the Court are pertinent: -

49. As in Satnam Chand Kohli67, in the present case also, the petitioners have referred to Apoorv’s suit in paragraph 18 of the petition but not to the application filed by them under Section 8 of the Act, or the orders passed thereupon. Their pleading in rejoinder, as noted above, also does not make out the case that the suppression of the order in the present petition was due to the erroneous legal advice.

50. In this light, I am of the view that the petitioners were obliged to disclose the fact that they had made an application under Section 8 of the Act in the proceedings instituted by Apoorv. The inclusion of a reference to Apoorv’s suit in the petition clearly shows that the petitioners were aware of its relevance. While seeking appointment of an arbitrator in the present case, the fact that they had been refused reference to arbitration in the suit, cannot possibly be discounted as irrelevant. A litigant is certainly entitled to offer any explanation available to explain a particular fact—or indeed an adverse order of a Court —but cannot get away by avoiding reference to a relevant fact or order altogether. For the aforesaid reasons, at least as far as Apoorv is concerned, the petition is not only liable to be rejected, but the petitioners are guilty of a suppression of material facts and must be visited with an order of costs. Supra (note 65).

51. In view of the aforesaid findings on these significant aspects, I am of the view that the present petition cannot succeed, and it is not necessary to consider the other arguments raised by the respondents. It is, however, open to the petitioners to take such further or other proceedings in this regard, including by invocation of the arbitration clause, if they are so entitled in law. The rights and contentions of the respondents in this regard are reserved.

52. For the aforesaid reasons, the petition is dismissed. In view of the finding of suppression of material facts by the petitioners, as far as Apoorv is concerned, the petitioners will pay costs of ₹50,000/- to Apoorv. As against the other parties, there will be no order as to costs.