Bombay High Court
Smt Aruna Nilesh Shah vs Smt Motiben Mulchand Shah And 7 Ors on 29 September, 2025
2025:BHC-OS:16666
12-CARAP-82-2024==.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION APPLICATION NO. 82 OF 2024
Digitally
signed by
SHRADDHA
SHRADDHA KAMLESH
Aruna Nilesh Shah ... Applicant
KAMLESH TALEKAR
TALEKAR Date:
2025.09.29
Vs.
19:03:49
+0530 Inter Globe Services & Ors. .. Respondents
WITH
SUIT NO. 852 OF 2016
WITH
INTERIM APPLICATION NO. 4903 OF 2022
IN
SUIT NO. 852 OF 2016
Aruna Nilesh Shah ... Petitioner
Vs.
Motiben Mulchand Shah & Ors. ... Respondents
Mr. Vishal Kanade a/w. Mr. Rubin Vakil, Ms. Sonam Mhatre and Mr. Amit
Mishra i/b Dhaval Vussonji & Associates, for Petitioner.
Mr. Chetan Kapadia, Senior Advocate a/w. Mr. Rahul Sarda, Mr. S.H.
Merchant, Rihal Kazi, Guru Shanmugam and Ms. Zainab Tinwala i/b M & M
Legal Ventures, for Respondents in CARAP-82-2024 and Applicants in both
IAs.
CORAM : SOMASEKHAR SUNDARESAN, J.
Date : September 29, 2025
Judgment:
Context and Factual Background:
1. Commercial Arbitration Application No. 82 of 2024 ("Section 11
Application") is an application filed by Aruna Nilesh Shah (" Aruna") under
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Section 11 of the Arbitration and Conciliation Act, 1996 (" the Act"), seeking
reference to arbitration of all disputes and differences between the parties in
connection with a Partnership Deed dated April 1, 1988 (" Partnership Deed")
that governs a partnership firm called Inter Globe Services (" Inter Globe").
2. Aruna's father Mr. Mulchand Anantji Shah ("Mulchand") was a
partner of Inter Globe until his demise on August 26, 2013. Suit No. 852 of
2016 ("Suit 852") had been filed by Aruna in relation to disputes and
differences with other family members and claimants to Mulchand's estate.
Inter Globe and its other partners too were parties and defendants in Suit
852, which came to be disposed of by execution of Consent Terms dated May
2, 2022 ("Consent Terms").
3. Interim Application No. 4903 of 2022 (" IA 4903") is an
application filed in the disposed-of Suit 852, seeking a declaration that the
term "mutually agreed amount", referred to in the Consent Terms being
payable by Inter Globe to Aruna, is Rs. ~11.11 Crores. IA 4903 also seeks an
injunction against initiation of any arbitration between the parties.
4. Interim Application No. 2996 of 2023 ("IA 2996") is an Interim
Application in IA 4903 seeking to lead evidence by two witnesses, namely Mr.
Nayan Shah and Mr. Paresh Haria, the cousin and uncle of Aruna, in support
of the reliefs sought in IA 4903.
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Analysis and Findings:
5. I have heard, at length, Mr. Chetan Kapadia, Learned Senior
Advocate on behalf of Inter Globe and its partners, and Mr. Vishal Kanade,
Learned Advocate on behalf of Aruna. With their assistance I have examined
the record.
6. The issues involved in both the proceedings - the Section 11
Application and in IA 4903 - are the same, namely, to examine if there exists
an arbitration agreement and to see if on the face of the record, the disputes
and differences sought to be referred to arbitration already stand settled in
terms of the Consent Terms.
7. Inter Globe had been first constituted on November 11, 1974 and
eventually was governed by the Partnership Deed. The existence of the
arbitration agreement is not in dispute. In the interest of brevity, the
arbitration agreement is not being extracted here. Suffice it to say that this
matter falls within the jurisdiction of this Court.
8. Mulchand passed away intestate. In Suit 852, Aruna raised
disputes and differences within her family in relation to their succession to
Mulchand's rights and interests in Inter Globe's capital, goodwill and assets
("Suit Subject") under the Hindu Succession Act, 1956. Aruna's mother and
siblings were Defendant Nos. 1 to 3 in Suit 852. Inter Globe, the firm
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governed by the Partnership Deed was Defendant No. 4, while Defendant
Nos. 5 to 8 were the other partners of Inter Globe.
9. A Mediator came to be appointed on September 29, 2017 and the
parties eventually reached a resolution by which Aruna accepted a one-time
settlement of being paid Rs. 3.6 Crores to discharge her mother and siblings,
and also accepted the assignment of all rights, title and interest in the Suit
Subject from her mother and siblings. This was to be a full and final
settlement of all the claims due and disputes raised by Aruna against her
mother and siblings, which led to the execution of the Consent Terms.
10. Under the Consent Terms, Defendant No. 2, Shailesh Mulchand
Shah ("Shailesh"), i.e., Aruna's brother, would pay Aruna a lumpsum amount
of Rs.3.6 crores, to discharge claims against himself, Defendant No. 1
Motiben Mulchand Shah ("Mother") and Defendant No. 3 Ritesh Mulchand
Shah ("Ritesh"), another sibling in Suit 852. It is seen from the Consent
Terms that the parties being discharged in the course of the Consent Terms
were Defendant Nos. 1, 2, 3 and 8, namely the Mother, Shailesh, Ritesh and
M/s Trans Atlantic Traders. All the disputes and differences that have been
settled in terms of the Consent Terms were essentially disputes between
Aruna and the aforesaid four parties.
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11. Inter Globe was only one part of Mulchand's estate. Aruna was
authorized irrevocably under the Consent Terms to pursue any share of
Mulchand in Inter Globe and towards this end, an irrevocable power of
attorney was granted by the Mother, Shailesh and Ritesh in favour of Aruna.
12. Aruna also agreed in the Consent Terms that upon receipt of a
"mutually agreed amount" payable by Inter Globe, Inter Globe and its other
partners would stand released and discharged in respect of Mulchand's share
in the Suit Subject. The Consent Terms record that upon payment of the
"mutually agreed amount" payable by Inter Globe to Aruna, the Suit 852
would be disposed of insofar as it relates to Defendant Nos. 4 to 7 who are
essentially the Applicants in IA 4903. The Consent Terms also record that
upon failure of the "mutually agreed amount", Aruna would be entitled to
take such steps as are available in law. It is the term " mutually agreed
amount" that is the subject matter of the current controversy between the
parties - now, Aruna on the one side and Inter Globe and its partners on the
other.
13. The Consent Terms came to be placed before and approved by a
Learned Single Judge of this Court by an order dated May 2, 2022. An
escrow agent came to be appointed in terms of the Consent Terms to hold the
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various documents and release them among Aruna, the Mother, Shailesh and
Ritesh, in accordance with the terms agreed by the parties.
14. The order dated May 2, 2022 specifically deals with the role of
Inter Globe and its other partners. The order states that the Consent Terms
have been executed by and on behalf of Inter Globe and its partners and
records the fact that the Consent Terms stand converted into an order and
decree, thereby disposing of Suit 852. The matter was kept for reporting
compliance. On June 15, 2022, when the matter was taken up to examine the
compliance with the Consent Terms, it was explicitly recorded that Aruna
and Inter Globe and its other partners had not yet arrived at the mutually
agreed amount referred to the in the Consent Terms.
15. Aruna's Advocate had requested the Learned Single Judge to
consider taking up the matter in Chambers on any date to try and see if the
disputes between Aruna and Inter Globe and its other partners could be
worked out without the need to pursue further legal remedies. The Advocate
for Inter Globe and the other partners agreed to the suggestion of conferring
in Chambers of the Learned Single Judge to explore a potential resolution.
16. It is evident that the disputes and differences that form subject
matter of these proceedings relate to what is the amount to which Aruna is
entitled from Inter Globe being the person solely authorised and entitled to
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receive Mulchand's share from Inter Globe. Indeed, the subject matter of
Suit 852 was the inter se dispute among Aruna, the Mother, Shailesh and
Ritesh as to who would be entitled to Mulchand's share from Inter Globe.
That dispute was settled by way of the Consent Terms. The only facet in the
Consent Terms that involves Inter Globe and its other partners is that upon
payment of the mutually agreed sum to Aruna, Inter Globe and its partners
would stand discharged.
17. Disputes and differences subsist about what that mutually
agreed sum is. The Consent Terms record that if the payment of the mutually
agreed sum is not made, Aruna may have recourse to other legal remedies.
The subject matter of the dispute and differences is what the firm has to pay
on account of its deceased partner. The dispute is about accounts of the firm
and the value of the goodwill of Inter Globe and Mulchand's estate's share in
such goodwill. Mr. Kapadia would point to contemporaneous accounting
entries and the revision to the value of assets and the enhanced amount
payable to Mulchand, which is pitched at Rs. ~11.11 crores. The basis of such
computation is disputed on behalf of Aruna. This would fall squarely in the
domain of the arbitration proceedings since this is a dispute relating to the
Partnership Deed, which unequivocally contains an arbitration clause.
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18. The fact the disputes between Aruna and her Mother and
siblings was the subject matter of Suit 852 and that such disputes had been
settled, and also the fact that the mutually agreed amount had remained
unresolved when the matter was kept for reporting compliance, is also writ
large from the record. This is why Aruna's Advocate had suggested a meeting
in the Chambers of the Learned Single Judge. If the mutually agreed amount
had been finally determined and there had been no scope for controversy,
there would have been no reason for the Learned Advocate for Inter Globe to
be agreeable to a hearing in Chambers to examine a resolution.
19. The unresolved disputes ought to be adjudicated upon and
resolved by arbitration. Suit 852, which primarily dealt with the inter se
disputes within Aruna's family, has been finally disposed of. There is no
scope for an anti-arbitration injunction being passed in an Interim
Application filed in the disposed of Suit 852 in relation to disputes between
Aruna and Inter Globe. The Consent Terms envisage resorting to legal
remedies, and in view of the arbitration agreement in the Partnership Deed,
the legal remedy available is the arbitration proceedings between Aruna, who
is now entirely entitled to the right, title and interest of the late Mulchand in
Inter Globe, and Inter Globe and its partners under the Partnership Deed.
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20. Notwithstanding the persuasive skills of Mr. Kapadia who would
indicate that evidence should be led in these proceedings by the two
witnesses sought to be introduced, in my opinion, at the highest, this would
be a case of having to show to the arbitral tribunal that disputes and
differences ought not to exist. Mr. Kanade is right in his submission that at
best, Inter Globe's contention is one of there having been 'accord and
satisfaction', which on the face of the record is not borne out in view of the
claim of satisfaction being based on an oral understanding. That the amount
of Rs. ~11.11 Crores, which is not agreed to in writing but is contended to
have been agreed orally, for which evidence is sought to be led through the
two proposed witnesses, is a matter that ought to be proved before the
arbitral tribunal and not in IA 4903, in the disposed-of Suit 852.
21. On the face of the record, the Consent Terms record the clear
and final settlement of disputes between Aruna and the Mother and siblings,
and for Inter Globe to be considered as having settled all disputes with
Aruna, one would need firm evidence of an amount of settlement being
mutually agreed and being discharged. Contemporaneous developments
relating to the very same Consent Terms would indicate that Aruna and Inter
Globe did not have closure on the matter and even suggested and agreed to
have the matter examined in the Chambers of the Learned Single Judge to
explore closure.
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22. The very same witnesses as covered by IA 2996 could always lead
evidence before the arbitral tribunal and demonstrate that they had reached
agreement on the amount due to Mulchand from Inter Globe.
23. Therefore, in my opinion, the Section 11 Application is
meritorious and deserves to be allowed by appointing an Arbitral Tribunal,
which is done in the following terms:-
A] Justice (Retd.) K. R. Shriram , Former Chief Justice
of Madras and Rajasthan High Courts and Former Judge of
this Court is hereby appointed as the Sole Arbitrator to
adjudicate upon the disputes and differences between the
parties arising out of and in connection with the Agreement
referred to above. The contact details of the Arbitrator are as
under :
Office Address : Suite 1515, 15 th Floor, Maker
Chambers, V. Jamnalal Bajaj Marg, Nariman
Point, Mumbai 400 021.
Tel No. 022-22852790
Email : [email protected]
B] A copy of this Order will be communicated to the
Learned Sole Arbitrator by the Advocates for the Applicant
within a period of one week from the date of upload of this
order. The Applicant shall provide the contact and
communication particulars of the parties to the Arbitral
Tribunal along with a copy of this Order;
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C] The Learned Sole Arbitrator is requested to forward
the statutory Statement of Disclosure under Section 11(8)
read with Section 12(1) of the Act to the parties within a
period of two weeks from receipt of a copy of this Order;
D] The parties shall appear before the Learned Sole
Arbitrator on such date and at such place as indicated, to
obtain appropriate directions with regard to conduct of the
arbitration including fixing a schedule for pleadings,
examination of witnesses, if any, schedule of hearings etc. At
such meeting, the parties shall provide a valid and functional
email address along with mobile and landline numbers of the
respective Advocates of the parties to the Arbitral Tribunal.
Communications to such email addresses shall constitute
valid service of correspondence in connection with the
arbitration;
E] All arbitral costs and fees of the Arbitral Tribunal
shall be borne by the parties equally in the first instance, and
shall be subject to any final Award that may be passed by the
Tribunal in relation to costs.
24. The Section 11 Application is finally disposed of in the aforesaid
terms. Therefore, IA 4903 and IA 2996 are also finally disposed of without
grant of the reliefs sought therein.
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25. Needless to say, nothing contained in this order is an expression
of an opinion on merits of the matter or the relative strength of the parties.
All issues on merits are expressly kept open to be agitated before the arbitral
tribunal appointed hereby.
26. All actions required to be taken pursuant to this order, shall be
taken upon receipt of a downloaded copy as available on this Court's website.
[ SOMASEKHAR SUNDARESAN, J.]
September 29, 2025
Shraddha
