Sh. Naresh Dass Khanna & Another vs Sh. Ramesh Dass Khanna & Others
2009 Latest Caselaw 3510 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+ OMP No.425/2009 (U/s.9 of the Arbitration Act, 1996) & IA
No.11265/2009 (of the Respondents No.1 & 6 U/s.8 of the
Arbitration Act, 1996)

%                       Date of decision: 2nd September, 2009


SH. NARESH DASS KHANNA & ANOTHER                        ....Petitioners

                          Through:   Mr. Mr. S.K. Puri, Sr. Advocate with
                                     Mr. Maneesh Goyal, Advocate

                                  Versus

SH. RAMESH DASS KHANNA & OTHERS                      ... Respondents

               Through: Mr. Sachin Puri with Mr. Vikas Tomar, Advocates
                        for the Respondents No.12 to 16 and
                        Mr. Kirtiman Singh with Ms. Mahima Gupta,
                        Advocates for the Respondents No.1 & 6

                                  AND
OMP No.442/2009 (U/s.9 of the Arbitration Act, 1996) & IA
No.11266/2009 (of the Respondents No.1 & 2 U/s. 8 of the
Arbitration Act, 1996)


SH. MAHESH DASS KHANNA & ANOTHER                        ....Petitioners

                          Through: Mr. Sachin Puri with Mr. Vikas Tomar,
                                   Advocates

                                  Versus

SH. RAMESH DASS KHANNA & OTHERS                      ... Respondents
                Through: Mr. S.K. Puri, Sr. Advocate with Mr. Maneesh
                        Goyal, Advocate for the Respondents No.3, 12,
                        18, 19, 20 & 21 And Mr. Kirtiman Singh with Ms.
                        Mahima Gupta, Advocates for the Respondents
                        No.1 & 2.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may             No
      be allowed to see the judgment?

2.    To be referred to the reporter or not?            No

3.    Whether the judgment should be reported           No
      in the Digest?




OMP No.425/09 & OMP No.442/2009                                Page 1 of 5
 RAJIV SAHAI ENDLAW, J.

1. The petitioners have sought interim measures from this court

of restraining the respondents Mr. Ramesh Dass Khanna and Mr.

Ganesh Dass Khanna in both the petitions from creating any third

party interest or executing any sale deed qua property No.4770/24,

Bharat Ram Road, Daryaganj, Delhi. It is the admitted position that

the parties pursuant to an arbitration agreement had submitted their

disputes before an arbitrator Mr. P.N. Seth; the parties during the

course of the arbitration proceedings arrived at a settlement, the

terms whereof were recorded in a document titled Memorandum of

Family Settlement dated 16th October, 2007; the arbitrator Mr. P.N.

Seth on 20th October, 2007 in exercise of the powers under Section

30 of the Arbitration Act, 1996 made an award in terms of the said

family settlement. In terms of the said family settlement the

respondents Mr. Ramesh Dass Khanna and Mr. Ganesh Dass Khanna

were to make certain payments to the petitioners of which two

installments have been paid and the other installments continue till

31st March, 2012; it was also agreed that to secure the said

payments, the said respondents shall deposit the title deeds of their

property aforesaid with the petitioners.

2 The petitioners have instituted these petitions for interim

measures to restrain the respondents from selling, alienating or

encumbering the aforesaid property. Vide ex-parte order made in

these petitions the respondents were so restrained.

3 The aforesaid respondents have not filed any reply to these

petitions. Applications aforesaid under Section 8 have been filed. It

is the contention of the counsel for the respondents that the powers

under Section 9 can be exercised only when an arbitration

proceeding is contemplated. It is further contended that the

petitioners have not stated that any arbitration proceedings are

contemplated and have also not approached the named arbitrator. It

is thus contended that the present petitions under Section 9 are

barred by Section 8 of the Act. It is further contended that the

award is executable as a decree under Section 36 of the Act and the

remedy if any of the petitioners is to execute the award and not to

approach this court under Section 9 of the Act. It is further

contended that the Memorandum of Family Settlement in terms

whereof the award aforesaid was made by the arbitrator itself in

Clause 20 thereof provides for arbitration and if any disputes have

arisen relating to the family settlement, the remedy of the petitioners

is to approach the arbitrator and not this court under Section 9 of

the Act. In fact the counsel for the said respondents had at the

outset contended that these petitions be disposed of with direction to

the petitioners to approach the named arbitrator in the

Memorandum of Family Settlement aforesaid, under Section 17 of

the Act. It is also informed that the said respondents have in fact

already approached the said arbitrator in connection with certain

other disputes which have arisen relating to implementation of the

family settlement.

4 The senior counsel for the petitioners has on the contrary

contended that the question of approaching the arbitrator at this

stage does not arise since there are no disputes and all that the

petitioners are seeking is to restrain the said respondents from

acting in contravention of the family settlement. Doubts are also

expressed as to the partiality of the named arbitrator and it is stated

that the petitioners in the then circumstances were compelled at the

time of family settlement to agree to the said arbitrator.

5 Section 9 provides for interim measures to be sought not only

before or during the arbitral proceedings but also at any time after

the making of the award but before it is enforced in accordance with

Section 36. In the present case the balance payments in terms of the

family settlement are not as yet due to the petitioners. Thus the

petitioners at this stage cannot approach this court for executing the

award for recovery of the said amounts. However since the

payments agreed to be made in installments were secured by the

property aforesaid, in my view the petitioners are entitled to

approach the court under Section 9 to restrain the respondents from

dissipating the security given for ensuring the payment. The

position is the same as in the case of a party in whose favour a

monetary award has been made, approaching the court before its

execution for restraining the respondents from dealing with their

assets so as to defeat the award/decree. The counsel for the

respondents has not been able to show as to what is the dispute for

which the petitioners should have pleaded their readiness for or

should approach the arbitrator inasmuch as the only grievance made

in this petition is against the sale of the properties. Thus the

principle laid down in Firm Ashok Traders Vs. Gurumukh Das

Saluja AIR 2004 SC 1433 of the parties approaching the court under

Section 9 being ready and willing to commence arbitration would not

apply to the facts of this case.

6 The senior counsel for the petitioner has stated that if the said

respondents are restrained from selling, encumbering or otherwise

dealing with the property aforesaid till payments of the entire

amounts in terms of the family settlement, the petitioners would be

satisfied and would at this stage not press for the relief of deposit of

title deeds of the property with the petitioners.

7 The counsel for the said contesting respondents has not urged

any other point in opposition to the petition.

8 Accordingly, the applications under Section 8 of the Act are

dismissed and the petitions under Section 9 are allowed. The

respondents Mr. Ramesh Dass Khanna and Mr. Ganesh Dass Khanna

are, till the payment of the monies agreed to be paid to the

petitioners in terms of the family settlement aforesaid, restrained

from alienating, encumbering, dealing with or parting with the

possession of property No.4770/24, Bharat Ram Road, Daryaganj,

Delhi or any part thereof. The counsel for the said respondents

confirms that as of today the said respondents are in physical

possession of the entire said property as well as the title deeds with

respect thereto. No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) September 2nd, 2009 J