Jinam Arihant Realtors vs Neha Yogesh Sachde
2026 Latest Caselaw 1189 Bom

Bombay High Court

Jinam Arihant Realtors vs Neha Yogesh Sachde on 3 February, 2026

2026:BHC-OS:3138
                                                                                        Judgement-ARPL-20865-2023.docx




                                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                                        ORDINARY ORIGINAL CIVIL JURISDICTION
          Digitally
          signed by
          CHAITANYA
CHAITANYA ASHOK
ASHOK     JADHAV
                                     ARBITRATION PETITION (L) NO. 20865 OF 2023
JADHAV    Date:
          2026.02.03
          16:49:46
          +0530




                        Jinam Arihant Realtors And Ors.                                           ...Petitioners

                                   Versus

                        Neha Yogesh Sachde                                                        ...Respondents



                             Mr. Atul G. Damle, Senior Counsel, i/b Ashish J. Dubey, for the
                             Petitioners.

                             Mr. Shanay Shah, a/w Kumar Kothari, i/b Vohuman Legal, for
                             Respondent.


                                                           CORAM : SOMASEKHAR SUNDARESAN, J.

PRONOUNCED ON : FEBRUARY 3, 2026

ORAL JUDGEMENT :

Context and Factual Background:

1. This is a Petition filed under Section 34 of the Arbitration and

Conciliation Act, 1996 ("the Act") challenging an arbitral award dated

April 29, 2023 ("Impugned Award") by which a Learned Arbitrator has

allowed the claim of the Respondent, Neha Yogesh Sachde ("Sachde")

against the Petitioners. Petitioner No. 1, Jinam Arihant Realtors

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("Jinam"), is a partnership firm, of which Sachde owns a 15% partnership

interest, while Petitioners No. 2 to 7 hold the remaining 85% partnership

interest.

2. Reliefs sought by Sachde included a declaration that Jinam,

constituted under the partnership deed dated December 12, 2011

("Partnership Deed"), was valid and subsisting until it was dissolved

with effect from September 27, 2019. Sachde also sought rendering of

accounts since inception and until such dissolution or such further date, as

the Learned Arbitral Tribunal may deem fit and proper. Various other

attendant reliefs, including disclosures, were sought. The Petitioners also

filed a counter claim but withdrew the same.

3. Jinam was to develop a building project pursuant to

redevelopment of a certain land parcel situated in Goregaon. The

dramatis personae in the matter are in fact Sachde's father Mr. Pankaj

Somchand Shah ("Pankaj"), who is said to have been known to Petitioner

no. 7, Rasiklal N. Mehta ("Rasiklal"), who along with Petitioner no. 2,

Mr. Subhash V. Sheth (HUF) ("Sheth") and Petitioner no. 3, Mr.

Navalkishore G. Sharma (HUF) ("Sharma") constituted Jinam to

develop the property.

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4. It is common ground that the development of the subject property

did not take off - that was attributed to disputes over title to the property

in question. However, the parties appear to have had dealings across

projects, which will be alluded to later in this judgement. The arbitration

agreement is contained in the Partnership Deed and governs disputes and

differences under the Partnership Deed. In a bid to resolve disputes, a

memorandum of understanding dated December 25, 2015 ("MOU") was

executed between Sharma, Sheth and Sachde by which, it was determined

that Sachde would retire from the firm for a payment to her in the sum of

Rs. 1.17 crores, which was to be paid before March 31, 2016. If anything

remained unpaid by this date, it would need to be paid before June 30,

2016 with 21% interest. To secure such payout, it was also agreed in the

MOU that an equitable mortgage would be created over a certain flat

identified in another property, for which, an allotment letter was also

issued on the same day. It is upon payment of the contracted amount with

or without interest as applicable, that such security interest would stand

revoked.

5. It is Sachde's case that a sum of Rs. 46.50 lakhs had been received,

and the balance amount is still pending. Eventually, on July 6, 2019,

Sachde sought accounts and invoked arbitration. Another notice was

issued on September 27, 2019, which also went unheeded. Eventually, a

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Section 11 Application was filed to get an arbitral tribunal appointed,

which was allowed by a Learned Single Judge of this Court on October 14,

2021. In the Section 11 proceedings, it was contended by Jinam and its

other partners that the MOU overtook the Partnership Deed and that it

was not open to Sachde to initiate disputes under the Partnership Deed,

having agreed to leave the firm. Therefore, the MOU was relied upon to

state that the Partnership Deed was of no validity upon execution of the

MOU. The Learned Single Judge left this facet to be argued before the

Learned Arbitral Tribunal, which indicates why an issue of whether the

Partnership Deed was subsisting, came to be framed.

6. In the arbitral proceedings, the Petitioners contended that Sachde

had invested only Rs. 12 lakhs (the books of accounts showed only two

entries of Rs. 7 lakhs and Rs. 5 lakhs) and had also withdrawn Rs. 23

lakhs. Sachde's contention was that Rs. 1.17 crores were due under the

MOU and the deadline to pay the balance had been missed. Therefore, the

bargain of leaving Jinam was off the table, and her interest in Jinam

subsisted, until, of course, when the firm dissolved on September 27,

2019. The Petitioners contended that Sachde had received far more than

she invested and nothing more was owed to her. Sachde countered this by

contending that her investment in Jinam was actually Rs. 60 lakhs, of

which, Rs. 48 lakhs had been invested by her in Jinam in the form of cash.

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7. On June 7, 2022, Jinam and others filed an application consenting

to a decree in terms of prayers (a), (b) and (c) in the Statement of Claim,

which essentially meant that the Learned Arbitral Tribunal could declare

that Partnership Deed was valid and subsisting; Jinam was dissolved on

September 27, 2019; and that the partners of Jinam may be declared to be

jointly and severally liable to render true, faithful and accurate accounts of

Jinam from inception until dissolution or such further date as the Learned

Arbitral Tribunal deemed fit.

8. A week later, on June 14, 2022, Sachde filed an application asking

for recall of Pankaj as a witness to lead further evidence in connection

with the cash investment of Rs. 48 lakhs. It is noteworthy that all actions

by Sachde in the proceedings are through Pankaj as her constituted

attorney. Pankaj's basis of seeking to lead further evidence to support the

investment of Rs. 48 lakhs in cash was based on his contention that he had

found some CDs (compact discs) in his cupboard, which had contained

CCTV footage of 2011 that would prove Sachde's cash investment of Rs. 48

lakhs in Jinam. He would clarify later that he meant audio recordings and

not CCTV footage; and also that the recordings related to the year 2016-17

and not 2011.

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9. The Learned Arbitral Tribunal asked the Petitioners to confirm if it

was submitting to an award in terms of the three prayers as indicated in its

application, with a confirmation that Sachde had invested Rs. 60 lakhs in

Jinam. Sachde indicated that there would be no objection if the

Petitioners would also confirm that there is no quarrel left over Sachde's

contentions. The Petitioners responded that the investment of Rs. 48

lakhs in cash was being categorically denied. The Learned Arbitral

Tribunal was pleased to pass an order on July 22, 2022 allowing Sachde's

request for leading further evidence on her investment in cash, and

rejected the Petitioners' request for passing an award granting the three

main prayers sought by Sachde on the ground that the Petitioners were

seeking to escape trial of the core issues involved and leaving all disputes

completely open.

10. The issues framed by the Learned Arbitral Tribunal essentially

centred around the following:-

            a.       Whether Sachde was a 15% partner in Jinam;

            b.       Whether the Partnership Deed was valid and subsisting;

            c.       Whether Jinam stood dissolved with effect from September

            27, 2019;




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            d.      Whether Jinam and its other partners proved that Jinam's

accounts had been settled and that Sachde had been paid far more

than what had been invested;

e. Whether Jinam and its other partners were jointly and

severally liable to render true, faithful and accurate accounts to

Sachde from the date of incorporation until the date of dissolution.

11. Pankaj filed an additional affidavit dated August 26, 2022 seeking

to bring on record telephonic recordings of certain conversations said to

have been had with the Petitioners some time in 2016-17. It was his case

that such recordings would indicate that there were cash transactions

between the parties and would help prove the cash investment of Rs. 48

lakhs by Sachde into Jinam. The affidavit of Pankaj essentially sought to

bring on record a pen drive containing three audio recordings of a length

of 10 minutes 58 seconds; 12 minutes 17 seconds; and 27 minutes and 33

seconds respectively.

12. According to Pankaj, these recordings had originally been made on

his Samsung phone. He claimed that in order to preserve these recordings,

he had moved them from the mobile phone onto a CD. Some in 2016, he

claimed, one Mr. Vipul Shah, his nephew helped him transfer the audio

recordings from his mobile phone to his computer and thereafter from the

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computer on to a CD, which was kept in his possession and he forgot

about their existence, because of which he did not produce them with his

original affidavit in evidence. However, when he took stock of

developments in the arbitral proceedings with the denial of cash

investment, he remembered the CDs and found them in his cupboard.

13. Pankaj purports to have visited the office of Mr. Vipul Shah again,

and asked him to examine his computer to look for whether a back-up of

the recordings were available. He says that he was successful in securing

the recording from the computer backup of Mr. Vipul Shah and

transferred the same to a pen drive.

14. The aforesaid affidavit enclosed an Electronic Document

Certificate filed by an expert, which essentially indicated the activity as

commencing from the movement of the recording from the CD to the

computer and onwards to the pen drive. This document does not, in any

manner purport to certify the original recording said to have been made

on the Samsung phone.

15. The audio recordings and their transcripts are said to have been

made at a meeting held in the office of Sharma with Rasiklal and Sharma.

Because the meeting had been fixed after a lot of follow-up and effort on

his part, he thought it fit to record it. Pankaj would admit that the

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conversation does not specifically contain a crystallised and specific

amount of Rs. 48 lakhs as having been invested by Sachde in Jinam, but it

would indicate that the books of accounts of Jinam were not reliable since

the Petitioners maintained three books of accounts and had never audited

them for over three and half years. Pankaj would indicate that Sheth had

a poor credit reputation and because of recent raids (not clear by which

agency), the books held by him were not available, but for which he would

have been able to indicate the precise amount invested in minutes.

16. The affidavit would further assert that Sharma had informed

Rasiklal that for eight years, there has been no improvement in the status

of the project. Pankaj would assert that since evidently, business was

being done entirely by keeping accounts outside the official books, it was

clear that Jinam's books were unreliable.

Impugned Award:

17. The Impugned Award holds emphatically in favour of Sachde. The

Learned Arbitral Tribunal has held that Sachde has proved that a sum of

Rs. 60 lakhs had been invested - Rs. 12 lakhs by cheque and Rs. 48 lakhs

in cash. The Partnership Deed is held to be subsisting. Sachde's 15%

stake is held to be alive. Sachde's claim of dissolution in September 2019

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is allowed. The Petitioners have been directed to render accounts since

inception. Not only is a direction given to render accounts and make

payments, the Petitioners have also been directed that the sums owed to

Sachde would be not less than Rs. 1.17 crores in terms of the MOU. A

chartered accountant was asked to draw up accounts and ensure

distribution to partners in proportion of their shares. Interest at 9% was

declared as payable until Sachde is actually paid. Sachde was also

awarded costs of Rs. ~12.29 lakhs.

Contentions of the Parties:

18. I have heard at length Mr. Atul Damle, Learned Senior Advocate

on behalf of the Petitioners and Mr. Shanay Shah, Learned Advocate on

behalf of Sachde, and with their assistance reviewed the material on

record that was available to the Learned Arbitral Tribunal when

adjudicating the matter.

19. Mr. Atul Damle would attack the Impugned Award on the ground

that:

a. The Learned Arbitral Tribunal was foundationally flawed in

allowing recall of a witness to fill up gaps found in the stance mid-

course during the arbitral proceedings;

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b. The MOU is held to be binding even when it was given up

by Sachde;

c. The law on proof in the form of electronic evidence is

entirely violated; and

d. When the Petitioners were willing to subject themselves to

an award, the further conduct of proceedings conducted by the

Learned Arbitral Tribunal was uncalled for and perverse.

20. Mr. Shanay Shah would submit that the Learned Arbitral Tribunal

has returned its findings on the basis of the evidence before it, the

quantity and quality of which was entirely for the Learned Arbitral

Tribunal to determine. The Learned Arbitral Tribunal was entitled to

allow additional evidence to arrive at the truth, he would contend. The

expert certification of the voice recordings left it unshaken. No cross

examination was conducted to dispel its veracity. Sharma had identified

his own voice in the recordings although he would not identify the others,

which enabled the Learned Arbitral Tribunal to return a plausible finding.

21. The MOU was binding on Jinam and its prime partners had agreed

that it would bind Jinam, Mr. Shah would submit. The crystallised

amount of Rs. 1.17 crores in the MOU could not be wished away. It was

even acted upon to pay Rs. 46.50 lakhs. The Learned Arbitral Tribunal

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was not wrong in making the sum set out in the MOU to be the minimum

amount payable to Sachde.

Analysis and Findings:

22. This case presents a problematic conundrum. It is indeed a vital

element of arbitration law that interference with arbitral awards should be

constricted and in conformity with the law declared on how Section 34 of

the Act must operate.

23. The Section 34 Court must refrain from being judgmental about

the manner of judgment by the Learned Arbitral Tribunal and must

simply look to whether the findings returned by the Learned Arbitral

Tribunal are impossible or perverse findings. Even the earlier approach

of discerning the absence of "judicial approach" is not to be resorted to

lightly, unless of course, the arbitral award is based on no evidence at all

or a completely perverse assessment of evidence, and that too with the

perversity being of the order that cuts to the root of the matter.

24. On the other hand, this is a classic case where public policy

considerations in assessing the Impugned Award have to be very carefully

considered with the judgement creditor categorically bringing to bear the

manner of conduct of business operations by all the parties concerned -

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entirely in the parallel economy, off the books of accounts and balance

sheet of the firm, with their conversations littered with handling of cash

and role of politicians of nearly every prominent political party in

Mumbai.

25. It is with this perspective in mind that when one looks at the

transcript of the voice recordings introduced by Sachde, one cannot but

help notice that it reveals nothing except that all the parties appear to be

adept at and completely involved in cash transactions. It appears that the

financial dealings on paper in running business of the partnership were a

sham and completely unreliable. The parties merrily discussed various

projects and various cash payments, and they were all in it together. I

have been careful to examine the evidence and not weigh the evidence. A

sheer examination, on the face of it, would show that the transcripts are

incoherent and do nothing beyond indicating that the parties had the

habit of engaging in cash dealings. At the very least, there is nothing to

show that an investment of Rs. 48 lakh had been invested by Sachde or by

Pankaj in cash even while it is obvious that three layers of books and

diaries appears to have been maintained that would point to the real

dealings, and those had been seized in a raid by some enforcement agency.

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26. For the Learned Arbitral Tribunal to accept this as evidence of

investment in cash and return findings to allow the claim as made, does

not, to my mind, present a reasonable and plausible or even a possible

view. It is impossible to connect the dots in any reasonable manner to

solve the puzzle of what investment had been made by Sachde in Jinam

and how they went about computing the returns.

27. Indeed, the MOU did record that Jinam and its partners would pay

Sachde Rs. 1.17 crore. Payments to the tune of Rs. 46.50 lakhs had even

been made under the MOU. Sachde called off the MOU seeking a share in

Jinam instead, seeking accounts of the firm, even while evidently the very

project for which it had been formed did not get off the ground. The

Learned Arbitral Tribunal went a step ahead to hold that the accounts

would need to be provided and regardless of the accounts and the pay-outs

due to a 15% partner, at the least a return of Rs. 1.17 crores should be paid

to Sachde. This is an outcome that is completely implausible and

disconnected to the very claim made.

28. One could even understand a view that the MOU is an extension of

the Partnership Deed since its subject matter is re-arranging of the

relations between the partners. Indeed, Jinam claimed that the MOU

terminated the Partnership Deed and with it, the arbitration agreement -

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a contention that was rightly dismissed by the Learned Arbitral Tribunal.

The Learned Arbitral Tribunal has returned a finding that the Partnership

Deed was valid and subsisting and that the MOU did not bring it to an

end. The Learned Arbitral Tribunal has also held that the partnership

indeed was dissolved on September 27, 2019. The Learned Arbitral

Tribunal held that Sachde had indeed invested Rs. 60 lakhs, of which Rs.

48 lakhs had been invested in cash. The Learned Arbitral Tribunal

directed that accounts must be drawn up to ascertain the dues owed to

Sachde. In the same breath, the Learned Arbitral Tribunal held that the

amount contracted in the MOU would constitute the minimum payment

due regardless of the financials of the partnership. The amalgam of these

findings, and that too based mainly on incoherent voice recordings and

their transcript, I am afraid, renders the Impugned Award irrational and

arbitrary.

29. While the Section 34 Court must be slow to interfere with Arbitral

Awards unless there is material infirmity that cuts to the root of the

matter, indeed what one has on hand in these proceedings is an Arbitral

Award that has expressed satisfaction based on a transcript of voice

recordings that can be reasonably classified by gibberish, being treated as

evidence of having contributed capital in the sum of Rs. 48 lakhs in cash

taking the cheque contribution of Rs. 12 lakhs to a total of Rs. 60 lakhs.

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Not only does the transcript not indicate the amount invested, but also the

cross examination clearly records that Pankaj admitted that there was no

specific reference in it to the amount invested. Therefore, the finding in

this regard in the Impugned Award is truly inexplicable and irrational,

which in my view, regrettably necessitates an intervention under Section

34 of the Act.

30. What is clear is that Jinam and the other partners have cynically

attempted to submit themselves to an award in terms of the prayers

sought, even while insisting that such submission to an award is not based

on accepting the contention of Sachde having invested Rs. 48 lakhs in

cash. No fault can be found with the Learned Arbitral Tribunal for

rejecting such a self-serving proposition. Likewise, the arbitrator being the

master of the evidence and the prime arbiter of the quality and quantity of

evidence necessary to adjudicate, in my opinion, cannot be faulted for

allowing introduction of further evidence by recalling Pankaj as a witness.

However, after introduction of such purported evidence, which, even

taken at face value, does nothing more than indicate how the parties were

merrily engaged in cash dealings, the Learned Arbitral Tribunal concluded

that a precise infusion of Rs. 48 lakhs in cash had been proved.

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31. In my opinion, one has to be extremely careful not to re-appreciate

the evidence when examining the approach of the Learned Arbitral

Tribunal to the material before the arbitrator. At the same time, one would

have to examine whether the material in question could at all have been

interpreted by any reasonable person in the manner that the Learned

Arbitral Tribunal did and examine whether the finding is an impossible

view. If it is writ large on the face of the record that the findings rendered

represent an impossible view, i.e. a view that no reasonable mind could

justifiably take, it would then lead to the ground of perversity being

attracted. It is with this delicate fine balance that I have examined the

material on record, and not weighed or measured the evidence.

32. The additional affidavit of Pankaj seeking to bring on record the

transcripts of three conversations is problematic on many accounts. First,

evidently all parties have blatantly discussed having transactions not

forming part of any books of accounts. Indeed, taking the evidence at face

value, it appears that three sets of books of accounts had been maintained

and each of these represented a parallel accounting of what was done by

the parties. It is not even as if Pankaj was unaware of such a situation and

was taken by surprise at the meeting at which he recorded the

conversation surreptitiously. Pankaj himself claims to have invested such

a large sum in cash. Indeed, he claims that the cash in hand by him has

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been disclosed in his income tax returns. It is for him to demonstrate that

to the income tax department, should such details be sought. However,

whether the transcript of such recorded conversation even reasonably

points to a plausible view that Sachde had invested Rs. 60 lakhs in Jinam

(and not in multiple other projects - the transcript speaks of multiple

projects) is something that the Learned Arbitral Tribunal does not even

analyse.

33. The approach adopted appears to have been that once the

transcript showed some evidence of any cash dealing among the parties,

the Learned Arbitral Tribunal considered it plausible to conclude that

Sachde had invested Rs. 48 lakhs in cash in Jinam. To my mind, this is

where perversity strikes at the heart of the findings in the Impugned

Award.

34. The voices attributed to the partners of Jinam and to Pankaj,

would indicate that all parties were willing participants in a throbbing

business activity that was entirely conducted off the books in the parallel

economy. The very transcripts of the conversations sought to be brought

on record names multiple politicians of multiple parties. This could be

name-dropping to brag about influence wielded. It could even be true.

However, how it indicates any reasonable basis to hold that the

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investment of Rs. 60 lakhs stood proved, presents a gaping hole in the

Impugned Award.

35. What is also clear is that all the parties have indulged in activity

that is clearly underground and not above board. Even if one were to take

a view that merely because the dealings were in cash, the dealings in real

estate were not unenforceable contracts, what is apparent that the

illegality is the contract sought to be enforced i.e. the Partnership Deed

that is the agreement to constitute and run the affairs of Jinam. If the

running of multiple partnership firms was in cash (the project run by

Jinam did not take off) it begs the question as to whether the sheer

illegality in running of Jinam as a partnership firm and maintenance of its

books of accounts would raise public policy considerations when

examining an arbitral award purporting to enforce such cash dealings.

36. It is in that light, that I am loathe to hold that the Impugned Award

presents a plausible and reasonable interpretation of the material on

record. To begin with, a bare reading of the record (as stated earlier, not

from the perspective of appreciation and weighing of evidence, but from

the perspective of examining whether any reasonable person would return

a firm finding of the nature returned by the Learned Arbitral Tribunal), to

my mind, betrays material that no reasonable person would conclude that

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a cash investment of Rs. 48 lakhs was proved. On the contrary, it appears

to me that the parties have essentially indulged in blatantly illegal actions

in the running of the partnership firm, and enforcing such an illegal

bargain is contrary to public policy.

37. If such transactions, that are blatantly contrary to the rule of law,

were to be permitted to be enforced by the legal system, there would be no

difference between enforcement of a valid and legal contract and

enforcement of bargains that are evidently in direct conflict with law. In

that context, in my view, the outcome does not withstand scrutiny from

the standpoint of being consistent with most basic notions of justice and

morality.

38. I have no doubt that the Learned Arbitral Tribunal was resolute in

its view that justice was being done and has returned findings the Learned

Arbitral Tribunal was convinced, presented a just outcome. However,

enforcement of justice in blatantly illegal ecosystem of transactions, is not

something that would pass muster on the touchstone of an arbitral

outcome having to be in consonance with the most basic notions of justice

and morality.

39. It also appears that the Petitioners had claimed that Rs. 23 lakhs

had been taken out of the business by Pankaj on Sachde's behalf. To

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dismiss this contention, the Learned Arbitral Tribunal holds that there

was no material to demonstrate it. However, for the finding that Rs. 48

lakhs had been invested in Jinam, the Learned Arbitral Tribunal finds that

the incoherent transcript that only shows rampant cash dealing was

adequate to prove the investment. That discussions about other projects

and cash flows relating to those projects were found in the transcript is

also a pointer to the impossible reading of the transcript in the Impugned

Award.

Public Policy and Fundamental Policy of Indian Law:

40. Guidance on how to deal with situations where parties to a

contract are confederates to a fraud on the public, is available in a

judgement rendered by the Supreme Court in the case of

Narayanamma1, where the Court was dealing with confederates to a

fraud, with one seeking enforcement against the other. Under the

Karnataka Land Reforms Act, 1961, a grantee of land with a 15-year lock-

in on the ownership of the land, purported to mortgage the land within

seven years in favour of another person. Within a month of the mortgage,

an agreement to sell was also executed, with the entire consideration being

purported to have been received and the land was also transferred. Upon

Narayanamma & Anr. v. Govindappa & Ors. - (2019) 19 SCC 42.

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death of the transferor, the name of the transferee was routinely entered

in the revenue records by a mutation entry. Whether such a transfer that

was in conflict with the statutory prohibition on transfer could be

specifically enforced, came up for consideration and the question

eventually reached the Supreme Court.

41. Noting the contents of another Supreme Court judgement in

Kedar Nath Motani2 and in Immani Appa Rao3 the Supreme Court,

in Narayanamma, held that the application of two maxims ex turpi

causa non oritur actio (right of action cannot arise out of transgression of

law) and in pari delicto potior est conditio possidentis (where each party

is involved in fraud the law favours him who is actually in possession) and

a third principle namely, nemo allegans suam turpitudinum audiendum

est (that party that has to first plead fraud in which he participated, must

fail). The Court found that where the contestants in a dispute have equally

engaged in fraudulent activity, enforcing the bargain at the behest of one

of the parties would lead to active assistance of the Court in recognising

and enforcing fraud while refusing to grant assistance of the Court may

passively assist another party to the fraud but it merely let the facts lie as

they are without any active assistance, which course is less injurious to

public interest.