Full Text
HIGH COURT OF DELHI
Date of Decision: 24th February, 2022
GURDEEP SINGH ..... Petitioner
Through: Mr Amit Choudhary, Ms Kanchan Semwal and Mr
Gurjas Narula, Advocates.
Through: Mr Ajay Kapur, Senior Advocate with Ms Mahima
Dang, Advocate.
VIBHU BAKHRU, J. (ORAL)
JUDGMENT
1. The petitioner has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter the ‘A&C Act’) impugning an arbitral award dated 13.05.2015 (hereafter the ‘impugned award’) passed by the Arbitral Tribunal comprising of a Sole Arbitrator (hereafter the ‘Arbitral Tribunal’). Factual Context 2022:DHC:772
2. Mr Santokh Singh, Mr Mohinder Singh (father of the petitioner) and Mr Hardev Singh (husband of the respondent) were three brothers who constituted a partnership firm on 23.06.1977 under the name and style M/s New Delhi Madhya Pradesh Roadlines, inter alia, to carry on transport business. In terms of the Partnership Deed, each of the partners enjoyed one-third share in the partnership firm.
3. On 30.04.1981, Mr Mohinder Singh (the father of the petitioner) and Mr Hardev Singh (husband of the respondent) re-constituted the said partnership firm. On the demise of Mr Hardev Singh (husband of the respondent), the respondent and Mr Mohinder Singh (father of the petitioner), entered into a fresh Partnership Deed on 30.05.1986, and reconstituted the firm, New Delhi Madhya Pradesh Roadlines (hereafter ‘the partnership firm’) with each partner having an equal share.
4. Thereafter, on 16.06.1986, the Municipal Corporation of Delhi Remunerative Project Cell allotted a plot bearing number AG-48, Sanjay Gandhi Transport Nagar, Delhi to the partnership firm. The aforesaid premises has since been in the joint possession of the petitioner and respondent and, has been lying vacant with a common lock set up by the parties.
5. Admittedly, over a period of time, the relation between the parties had strained. The respondent claims that, in the year 2006, the petitioner attempted to remove the common lock and installed his own lock with the intent to restrain the respondent from entering the premises.
6. Aggrieved by the conduct of the petitioner, on 16.06.2006, the respondent filed a suit for permanent injunction before the District Court (being Civil Suit No. 1051 of 2006) to restrain the petitioner from entering, dealing and supervising the aforesaid premises. In the proceedings before the District Court, the petitioner filed an application under Section 8 of the A&C Act for reference of disputes to arbitration in terms of the arbitration clause – Clause 17 of the Partnership Deed dated 30.05.1986. By an order dated 18.07.2006, the District Court dismissed the suit.
7. Subsequently, the respondent filed a petition before this Court under Section 9 of the A&C Act (being OMP 428/2006) and by an order dated 12.09.2006, this Court restrained the petitioner from creating any third party interest in respect of the property bearing number – AG-48 situated at Sanjay Gandhi Transport Nagar, Delhi. On 08.12.2006, this Court with the consent of the parties referred the disputes to arbitration and appointed the Arbitral Tribunal to adjudicate the disputes raised by the petitioner in its application filed under Section 8 of the A&C Act before the District Court.
8. At this point, it is relevant to refer to the disputes raised by the petitioner under paragraph 45 of its application filed under Section 8 of the A&C Act. The same reads as under: “45.
(i) What are the assets of the partnership firm M/s New Delhi Madhya Pradesh Roadlines?
(ii) How have the assets been appropriated by the parties to this action to acquire more/further assets, be in their own name, or even in the name of their family members?
(iii) Who, from amongst the partners of this firm M/s New
(iv) Who is to render accounts of this partnership firm M/s
(v) What amount(s) is due after rendition of accounts from one partner to the other? And
(vi) How is the partnership firm M/s New Delhi Madhya
9. The respondent filed its Statement of Claims before the Arbitral Tribunal and sought dissolution of the partnership firm along with fifty percent share in the partnership firm’s business and assets, as well as rendition of the accounts of the partnership firm. Reasons and Conclusion
10. The principal dispute between the parties arises in relation to certain properties as the petitioner claims interest in respect of the said properties. The said properties are listed hereunder: (i) 68-B, Mangolpuri (ii) 5008, Rui Mandi, Sadar Bazar, Delhi (iii) 10882, Manakpura East Park Road, Delhi
(iv) Raipur
(v) Plots in Sanjay Gandhi Transport Nagar, Delhi
(vi) Plot No. 8 Gujranwala Town, Part-II, Delhi
(vii) 23, Transport Nagar, Ludhiana
11. Mr Choudhary, learned counsel appearing for the petitioner submitted that the Arbitral Tribunal had grossly erred in rejecting the petitioner’s claim in respect of certain properties. He submitted that the respondent had admitted in her cross-examination that she had not acquired any immovable property in her own name as she had no independent source of income during the lifetime of her husband.
12. In addition, he stated that during the lifetime of her husband, she was looking after the household chores and therefore, she could not confirm on how the assets were acquired by her husband. Thereafter, Mr Choudhary advanced contentions in respect of each of the properties claimed by the petitioner as that belonging to the partnership firm.
13. It is not necessary for this Court to note down the contentions in respect of each of the properties. Suffice it to state that the learned counsel for the petitioner had referred to the written submissions filed by him before the Arbitral Tribunal and, had sought to advance his contentions in respect of the petitioner’s claim to each of the properties as mentioned therein.
14. He submitted that the property bearing number 8, Gujranwala Town-II was purchased in the year 1976-77 was subject to an oral settlement between the parties in 1978. He contended that in terms of the oral settlement, it was agreed that the said property would be owned and possessed by both the parties. He submitted that thereafter, the said property was also the subject matter of a written settlement deed, executed in the year 1993. He contended that the funds for purchasing the said property were generated from the business of the partnership firm. However, the Arbitral Tribunal has rejected the petitioner’s claim on the ground that the settlement deed dated 06.10.1993 was not stamped and registered.
15. Next, he submitted that the property bearing number AG-48, Sanjay Gandhi Transport Nagar was allotted in the name of the partnership firm and the entire consideration was paid by the partnership firm. He submitted that the petitioner had produced details as to the cheques as well as the receipts from the Municipal Corporation of Delhi, which reflected that the said plot of land had been purchased from the funds of the firm. He contended that the decision of the Arbitral Tribunal in not accepting that the property bearing number AG- 48, Sanjay Gandhi Transport Nagar belongs to the partnership firm, was patently erroneous.
16. Mr Choudhary stated that one of the petitioner had founded his claims on the assertion that the respondent did not have any independent source of income and therefore, the properties in question had been acquired from the funds of the partnership firm.
17. Insofar as the property described at Plot no.8, Gujranwala Town- II is concerned, the Arbitral Tribunal had rejected the contention that there was any oral settlement in the year 1978. Admittedly, the property was purchased sometime in the year 1976-77. There was no dispute that the construction was raised on the said plot sometime in the year 1977 and was completed in the year 1978. The said property is registered in the name of the respondent. The Arbitral Tribunal accepted that the respondent did not have any independent source of income. However, rejected the contention that the same implied that the property was purchased from the joint income of the brothers. The Arbitral Tribunal noted that the said property was purchased prior to the three brothers executing the first partnership deed (that is, before 23.06.1977). The partnership deed did not refer to the said plot as one of its assets and there was no material to indicate that the construction was carried out from the funds of the first partnership firm.
18. The learned counsel for the petitioner had submitted that the business of the partnership firm had started prior to the three brothers entering into the partnership deed. On a pointed query by this Court as to whether the same was reflected in the partnership deed, the learned counsel for the petitioner conceded that the first partnership deed (partnership deed dated 23.06.1977) specifically stated that the business of the partnership firm commenced in 1977 and not with effect from a period, prior to the three brothers entering into the partnership deed.
19. The contention that there was any settlement in the year 1978 was not accepted by the Arbitral Tribunal as there was no evidence to support such assertion, except the affidavit filed by Mr Gurdeep Singh (petitioner) and an application to the Municipal Authorities. However, it is admitted that he was a child at the material time and therefore, the Arbitral Tribunal had held that he had no personal knowledge of the same. The Arbitral Tribunal found that there was an application purportedly written by Mr Mohinder Singh (father of the petitioner) to the Municipal Authorities however, there was no evidence indicating whether the same was sent or, its results thereof.
20. It is clear from the above, that the Arbitral Tribunal had evaluated the evidence on record and rendered the impugned award. It is impermissible for this Court to reappreciate the evidence and readjudicate the disputes between the parties.
21. The learned counsel for the petitioner had also spent considerable time in contending that the property bearing numbers AG-6 and AG-48, located at Sanjay Gandhi Transport Nagar were properties of the partnership firm and were acquired from the funds of the firm.
22. The Arbitral Tribunal had found that the application issued to the Municipal Authorities for allotment of the property bearing Plot No. AG-6, Sanjay Gandhi Transport Nagar measuring 440 sq. meters was issued in the name of a sole proprietorship concern of Mr Hardev Singh ( New Delhi Madhya Pradesh Transport Servies). The Arbitral Tribunal also noted that a Writ Petition (being Writ Petition (C) No. 2328/1989 captioned as New Delhi Madhya Pradesh Transport Service v. Municipal Corporation of Delhi) had been filed before this Court in regard to the said property and directions were issued to the Municipal Corporation of Delhi (MCD) to preserve the same. The respondent had pursued the aforesaid Writ Petition as a widow of Mr Hardev Singh claiming that the property in question was allotted to the sole proprietorship concern of her deceased husband. The said petition was filed in the year 1989 and was allowed by this Court on 23.10.2002. At no stage, did the petitioner claim any interest in the said property or dispute that it was allotted to the sole proprietorship concern of Mr Hardev Singh (husband of the respondent).
23. After considering the above, the Arbitral Tribunal had concluded that the said property (AG-6, Sanjay Gandhi Transport Nagar, Delhi) which was registered in the name of the respondent did not belong to the partnership firm.
24. Insofar as the petitioner’s contention that the said property was acquired by payments made from the partnership firm, the Arbitral Tribunal found that the same did not establish that the partnership firm was the owner of the property in question. It is well accepted that payments are made from partnership firms for the benefit of the partners. Concededly, there was no material on record to reflect that the payments made from the account of the partnership firm were towards purchase of any asset by the firm and not to the account of the partner. It is possible that the payments made to MCD were debited to the personal account of the partner in the books of the partnership firm as his drawings or distribution of profits. Thus, mere payments made to MCD would be insufficient to establish that the property belonged to the partnership firm.
25. The Arbitral Tribunal rejected the petitioner’s claim in respect of the said property (A-6 Sanjay Gandhi Transport Nagar). However, in respect of the other property bearing number, AG-48, Sanjay Gandhi Transport Nagar, Delhi, the Arbitral Tribunal found that there was material evidence available on the record to state that the said property stands in the name of the partnership firm. Accordingly, the Arbitral Tribunal held that half of the share of the said property belonged to the petitioner and the other half of the share to the heirs of the respondent. This Court finds no grounds to interfere with the said finding of the Arbitral Tribunal.
26. The learned counsel for the petitioner further contended that the plot bearing number 641/17, admeasuring 5200 square feet located in Raipur, Chhattisgarh was purchased on 12.07.1982; and, an adjacent plot of land – Plot Number 634, Raipur, Chhattisgarh was purchased on 29.11.1982 as a godown for the partnership firm. He stated that both plot of lands were purchased from the funds of the partnership firm however, in the name of Mr Hardev Singh (husband of the respondent) as a partner of the partnership firm. He further stated that Mr Hardev Singh had signed an application for change of use of the aforesaid land in the name of the partnership firm, however, the same was erroneously, not considered by the Arbitral Tribunal.
27. Next, he submitted that a sale deed was executed on 03.09.1981 in respect of property bearing Plot number 625/2A, NG Road located in Zakhira which was purchased from the funds of the partnership firm. He further relied upon the Survey Report dated 17.03.1986 of the Municipal Corporation of Delhi, in support of his contention that the partnership firm was in possession of the said property, at the material time, until its acquisition by the Government in May 1987. He further stated that by an order dated 04.01.1996 passed by this court in Jasapal Kaur v. Delhi Development Authority, WP (C) No. 2946 of 1991 this court had allocated the property bearing Plot No. 68B Mangolpuri-II in lieu of the property located in Zakhira (Plot number 625/2A, NG Road) to the respondent. However, all litigation expenses were borne by the partnership firm and thus, the property located at Plot No. 68-B Mangolpuri-II would also form part of the properties of the partnership firm.
28. The Arbitral Tribunal found that the sale deed in respect of the said properties (Plot No. 641/37 and Pot No. 634) indicated that Mr Hardev Singh (husband of the respondent) was the purchaser and not the partnership firm. The Tribunal further referred to a letter addressed to the Competent Authority of Raipur wherein the purchaser of the property was also shown as Mr Hardev Singh. The Arbitral Tribunal found that even though the said letter described Sardar Hardev Singh as a partner of M/s New Delhi Madhya Pradesh Roadlines (partnership firm) however, the same was only a description of his designation and could not mean that the partnership firm was the owner of the said property. The Arbitral Tribunal concluded that even the sale deed provided no reference that the partnership firm was the owner of the said premises.
29. In respect of the property situated at the 68-B Mangolpuri-II, the Arbitral Tribunal found that the respondent had earlier purchased a property in Zakhira (Plot number 625/2A, NG Road) under her own name and on its acquisition by the Government, the respondent had a filed a Writ Petition before this Court. This Court by its order dated 04.01.1996 allotted the plot situated at 68-B Mangolpuri-II to the respondent in lieu of the property situated at Zakhira (Plot number 625/2A, NG Road). The respondent claimed allotment of the said property by filing a Writ Petition under her own name and no objection was raised by the petitioner. Whilst, the learned counsel for the petitioner contended that the property located at Zakhira was purchased from the funds of the partnership firm however, the Arbitral Tribunal found that the petitioner had failed to prove that payments made were for and on behalf of the partnership firm and, not from the account of the respondent as a partner.
30. Though the Survey Report dated 17.03.1986 indicated that, at the material time, the partnership firm was in possession of the plot of land situated in Zakhira nonetheless, the same did not indicate that the partnership firm was the owner of the said property. The Arbitral Tribunal found that the petitioner had failed to furnish any Statement of Account or Income Tax Return to prove that payments were made by the partnership firm as an owner of the said property.
31. It is clear from the above that the impugned award is informed by reason and has been made after examining and evaluating the evidence led by the parties. In essence, the petitioner seeks a readjudication of the disputes that have been adjudicated by the Arbitral Tribunal after examination and evaluating the evidence led by the parties.
32. This Court finds no infirmity with the decision of the Arbitral Tribunal. In any view of the matter, none of the contentions advanced on behalf of the petitioner even remotely indicate that the impugned award is vitiated by patent illegality or falls foul of the public policy of India.
33. The petition is accordingly, dismissed.
VIBHU BAKHRU, J FEBRUARY 24, 2022 v