Ravinder Prakash Punj vs Punj Sons Pvt. Ltd & Ors.
2012 Latest Caselaw 5310 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Judgment reserved on: 23.08.2012
      %                                Judgment delivered on: 06.09.2012

+                               EFA(OS) 19/2010

       RAVINDER PRAKASH PUNJ           ..... Appellant
                   Through: Mr. Sudhir Nandrajog, Senior
                             Advocate with Mr. Raman Gandhi,
                             Advocate.

                   versus

       PUNJ SONS PVT. LTD & ORS.                  ..... Respondents
                      Through: Mr. Naresh Thanai & Mr. Gaurav V.,
                               Advocates for the respondents No. 1
                               & 3.
                               Mr. Anupam Sharma, Advocate for
                               the respondent No. 2.

       CORAM:
       HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
       HON'BLE MR. JUSTICE VIPIN SANGHI

                             JUDGMENT

VIPIN SANGHI, J.

1. The appellant is aggrieved by the order dated 18.05.2010 passed in

Execution Petition No.186/2009 by the learned Single Judge, whereby the

said execution petition has been dismissed on the ground that the same is not

maintainable.

2. The execution petition had been preferred to seek to execute the

decree passed by the Court while making the award dated 15.11.1989,

passed by the learned sole arbitrator, „rule‟ of the court with slight

modification vis-à-vis, the direction contained in para-9 of the award. The

said direction required the parties to go back to the arbitrator for

implementation and interpretation of the award in case any dispute arose

between them in that regard. The arbitrator also sought to retain jurisdiction

to issue subsequent clarification. This aspect was also set aside by the Court

while, otherwise, affirming the award and passing a decree in terms thereof

vide judgment dated 30.05.1997, passed in Suit No.327A/1990 titled S.C.

Mathur v. V.P. Punj & Ors. We may note that the aforesaid judgment dated

30.05.1997 was assailed in FAO (OS) Nos.174/1997 and 88/1998 without

success, which were dismissed by this Court on 03.03.2009.

3. To appreciate this controversy, it is necessary to give a little

background of the matter. Late Sh. Kanhaya Lal Punj, it appears, was a very

successful businessman and established various businesses. He and his

family members also acquired a large number of properties. After his death,

disputes with regard to division of properties and businesses arose between

his descendants. These disputes were referred to arbitration.

4. There were three groups of persons before the arbitrator

comprising of 27 persons. Whereas 26 of them fell in two groups, namely

Group-I and Group-II comprising of 14 and 12 members respectively;

Group-III consisted of the widow of late Sh. Kanhaya Lal Punj. The award

made by the learned arbitrator was a result of a negotiated family settlement

agreeable to all the parties. The award sets out the details of the various

properties and businesses which were being carried out by the family, either

in the name of incorporated companies or in the names of partnership

concerns or proprietary firms, which were made the subject matter of

division. The award also recognized that :

"The Companies are being run and owned by the aforesaid Punj brothers alongwith their wives and children in their individual capacity and through HUF wherever applicable and alongwith a small number of shares held by certain outsiders who are close family friends.

Whereas the said companies are in reality in the nature of partnership, though wearing veils of Private Limited Companies." (emphasis supplied)

5. The learned arbitrator distributed the properties, businesses and the

business entities, i.e. the companies amongst the three groups, as enumerated

in the exhibits annexed to the award. The procedure to effect the partition,

transfer and vesting of assets in the three groups was also delineated in para-

6 of the said award. This procedure, inter alia, provided that the partnership

could be changed/modified to give effect to the award; the employees

attached to the divisions and companies taken over by each group and any

related office staff shall automatically become employees of the respective

companies/firms; the scheme of arrangement was required to be framed to

settle the distribution of the various divisions of businesses being carried out

by private limited companies, and; other similar steps were required to be

taken by the parties.

6. The purpose of narrating the aforesaid is to highlight the

undisputed position that all the parties to the said award dated 05/06.08.1987

recognised and acknowledged the fact that the assets of the family, though

held in the names of family held companies, partnerships, proprietary firms,

and in the name of HUFs and individuals, belonged to the family and for

their division, and for the division of the running businesses, the corporate

veil was lifted and divisions of businesses and properties and other assets

undertaken after a negotiated settlement was reached between them, without

being inhibited by the fact that various properties and assets were held - not

in the names of family members individually, but by the closely held

companies.

7. The aforesaid award was accepted by all concerned and was duly

implemented. It was made „rule‟ of the Court and a decree in terms thereof

was passed by this Court in Suit No.2461A/1987 on 17.03.1988, as no

objections were preferred to the said award by any of the parties. This award

would be referred to as the „first award‟ wherever necessary.

8. It appears that within the members of Group-II, referred to in the

first award, i.e. between four sons of late Kanhaya Lal Punj, namely Sh.

Virender Prakash Punj, Sh. Satya Narain Prakash Punj, Sh. Ravinder

Prakash Punj, and Sh. Nilender Prakash Punj, disputes arose which were

referred to the arbitration of Sh. S.C. Mathur vide reference dated

09.10.1989. This reference agreement contained the list of various

properties, private limited companies which were having assets, and all other

assets jointly held by the aforesaid four brothers - sons of late Sh. Kanhaya

Lal Punj, which were made the subject matter of arbitration. The reference

recorded that by an agreement dated 11.07.1987, the parties had appointed

Sh. S.C. Mathur as the sole arbitrator and referred all their unresolved

disputes to him for settlement by arbitration. It was also recorded that by

various resolutions passed by the Board of Directors and Shareholders, the

companies mentioned in the reference dated 09.10.1989 had agreed to

consider themselves to be bound by the directions given by the sole

arbitrator "since it was anticipated that in view of achieving an overall

settlement which would also have an adverse effect on the businesses of the

companies, some reallocation of their assets may become necessary".

9. The reference authorized the arbitrator Sh. S.C. Mathur, Chartered

Accountant to prescribe:

"(a) (i) Mode and manner of Division and distribution of the ownership, management and business of companies, firms referred to above and

(ii) the allocation and distribution of the Immovable Properties in Schedule-II, between the parties.

(b) In connection with the above, to consider the position of accounts of the respective companies and firms and to assist in the handing over of the running businesses to the parties with financial books, all records, documents and related files since its inception and possession of the premises etc. as a on-going concerns."

It was also agreed in the reference that "Alongwith the award, the

Arbitrator may give other appropriate directions for transfer of properties,

transfer of shares, interests and other matters as deemed necessary."

10. The learned arbitrator Sh. S.C. Mathur made and published his

award, as aforesaid, dated 15.11.1989. We have already noted the fate of

this award, i.e. it was made „rule‟ of the Court except with the deletion of the

direction contained in para-9 thereof.

11. This award, inter alia, enlisted the various businesses, companies,

firms, proprietorships etc. belonging to the four groups, namely, Group „A‟

led by Virender Prakash Punj; Group „B‟ led by Satya Narain Punj, Group

„C‟ led by Ravinder Prakash Punj and, Group „D‟ led by Nilender Prakash

Punj in Schedule I. It also recorded that:

"The companies are being run and owned by the aforesaid Punj brothers along with their wives and children in their individual capacity and through HUF wherever applicable and along with a small number of shares held by certain outsiders who are close family friends.

x x x x x x x x x x

WHEREAS now the parties have left it to me as to how the running businesses are to be allotted, finally divided and shared between the aforesaid four brothers and their heirs who are the

parties to this arbitration and to decide how the assets, liabilities and running businesses are to be settled."

12. The award also shows that the same was a result of negotiated

family settlement agreeable to all the parties and that the arbitrator sought to

facilitate the smooth transfer of businesses and immovable properties

amongst the four groups, as aforesaid.

13. We may note that the dispute in the present appeal is primarily

between the members of the Group „C‟ and Group „D‟, the appellant

belonging to Group „C‟ and the respondent no.2 belonging to Group „D‟.

The aforesaid award dated 15.11.1989 is referred to herein as the „second

award‟.

14. Para-3 of the second award deals with the various businesses. One

of the companies dealt with in the award is Punj Sons Private Limited

(PSPL). It appears that this company had different divisions located at

different locations. The learned arbitrator awarded the Ambattur Division to

Sh. R.P. Punj falling in Group „D‟. Clause 4 in para 3.1 of the award

provided as under:

"4. Punj Sons Private Limited (Parent Company) shall continue to exist and run its business under the Chairmanship of Shri V.P.Punj and Shri S.N.P. Punj, Managing Director. The Chairman shall have full authority over the entire operations and shall have the right to exercise two votes in case of any dispute. However, the Board is advised to nominate independent persons on the Board to protect the interest of all the shareholders and assist in the resolution of the outstanding issues."

15. The distribution of the equity shares of this company was provided

in clause 13 of para 3.1. Clause 14 under para 3.1 is relevant and reads as

follows:

"14. On the winding up of Punj Sons Private Limited, the factory industrial land shall belong to Shri V.P.Punj Group A, Shri R.P.Punj Group-C, Shri N.P.Punj Group D, in equal ratio. The remaining surplus will be divided amongst the four brothers."

16. A perusal of Schedule 3, Schedule 5 and Schedule 6 of the second

award shows that Group „A‟ (led by Virender Prakash Punj), Group „C‟ led

by Ravinder Prakash Punj, and Group „D‟ led by Nilender Prakash Punj got,

inter alia, 1/3rd share in factory land at Kalkaji of PSPL.

17. The appellant preferred Execution Petition No. 186/2009 seeking

the following reliefs:

"a. Direct that the property at Plot No.4, Factory Land Kalkaji Industrial Area, New Delhi-19 of Punj Sons Pvt. Ltd. be partitioned by metes and bounds and that the petitioner decree holder be put into possession of 1/3rd share of the same.

b. Direct that property at Building facing middle circle, behind plot no. M-4 and M-5, Connaught Place, New Delhi be partitioned by metes and bounds and the petitioner decree holder be put into possession of 1/3rd share of the same.

c. Direct that the rental income being derived from property at Building facing middle circle, behind plot NO. M-4 and M-5, Connaught Place, New Delhi be attached and the petitioner/decree holder be paid 1/3rd share of the rental income so being derived.

d. Director the defendants to give an account of the rent derived from portion of property as above and the DH be given 1/3 rd of the entire rental income so received since the date of decree.

e. Any other and further relief as this Hon'ble Court deems just and proper in the facts and circumstances of the case may also be granted."

18. The appellant disclosed in the execution petition that the factory

land at Kalkaji belonging to PSPL was allotted in the year 1956 by the Union

of India (UOI) on leasehold basis, being a plot of land measuring 3 Acres.

PSPL was also utilizing the adjacent vacant land admeasuring a few acres.

In the dispute which arose with the authorities, i.e. the DDA and the UOI, on

account of the demand for conversion charges for transferring the title of the

entire plot of land in the name of PSPL, litigation is pending in this Court.

The appellant claimed that the factory land at Kalkaji, New Delhi, belonging

to the PSPL has been apportioned in the ratio of 1/3 rd each amongst the

appellant, respondent No. 2 & respondent No. 3 as per Schedule 3, 5 & 6 of

the second award.

19. Before proceeding further, we may at this stage itself take note of

the fact that, even according to the appellant, the properties falling on Plot

Nos. M-4 & M-5, Connaught Place, New Delhi, did not specifically form

part of the arbitral award. On this short ground, the learned Single Judge

held that the appellant was not entitled to seek partition by metes and bounds

of the said properties or any specific relief in relation to the said properties in

the execution petition. Before us, learned counsel for the appellant has not

made any submission in relation to the dismissal of the execution petition

qua properties falling on Plots Nos. M-4 & M-5, Connaught Place, New

Delhi. Consequently, we are not inclined to interfere with the impugned

order insofar as it pertains to the said properties bearing Nos. M-4 & M-5,

Connaught Place, New Delhi. Even otherwise, we concur with the learned

Single Judge that since the said properties specifically did not form part of

the arbitral award, the appellant could not have sought the relief of partition

or distribution of rental income from the said properties in execution

proceedings.

20. So far as the relief sought in respect of the factory land at Kalkaji

belonging to the PSPL is concerned, the learned Single Judge had held as

follows:

"12. The decree holder in this case does not dispute that the property No.2, Kalkaji Industrial Area belongs to M/s Punj Sons. What is further sought to be argued is that, such company is only nominal, and, if anything, has become defunct. It is also argued that this Court in Execution cannot go behind a decree and has to enforce it uncritically. The Court is unable to accept the contention. Paras 8, 9 and 12 of the award which embodies the rights in respect of the company, was affirmed by this Court on 30.05.1997. These conditions in the award - are clearly premised upon the existence of M/s Punj Sons. Furthermore there is internal indication that the arbitrator was conscious about the continued existence of Punj Sons as is evident by specific clauses which mention about ownership of the Kalkaji property of the said private limited company. It is of course true that in the award a specific shareholding or entitlement to such shareholding in respect of such property has also been spelt out; yet the award like another document has to be read as a whole. It clearly indicates that in the event of winding up or liquidation of M/s Punj Sons, the shareholding or entitlement, towards specific undivided shares would devolve on one party or the other in the ratio as mentioned. Whether the company is defunct or dysfunctional is something that an Executing Court cannot go into. Even if such a position were to be accepted the corollary cannot be that such "defunct" company's assets are to be transmitted according to the terms of an award, without following the due procedure as prescribed by law, to wit directions by a competent Court constituted under the Companies Act."

21. In substance, the learned Single Judge held that since PSPL

continues to exist and the factory land at Kalkaji belongs to the PSPL, the

factory land at Kalkaji could not be distributed amongst the parties except in

accordance with the procedure prescribed by law by a competent Court

constituted under the Companies Act. It is only in the event of winding up

or liquidation of PSPL that the shareholding or entitlement towards specific

undivided shares would devolve on one party or the other in the ratio

mentioned in the award.

22. The submission of learned counsel for the appellant, premised on

the aforesaid background is that the corporate veil had been lifted by the

learned Arbitrators in both the arbitration proceedings as per the

understanding and agreement of the parties. It was the clear understanding

and admission of the parties that the family concerns/companies were truly

in the nature of partnership and the fact some of the family businesses were

run by closely held companies incorporated under the Companies Act did

not come in the way of the arbitral tribunal in treating the assets held by

these companies as different and distinct from the two companies. It is for

this reason that the learned Arbitrator in his award consciously distributed

the shareholding in the company PSPL separately from its assets.

23. Learned counsel further submits that the Clause 4 of para 3.1 of the

second award, which talks about the continuation of PSPL and Clause 14 of

para 3.1, which provides that on the winding up of PSPL, the factory

industrial land shall belong to Groups „A‟, „C‟ and „D‟ in equal ratio were

required to be understood in the proper context and reconciled which, it is

stated that, the learned Single Judge has failed to do.

24. Respondent No. 2 supports the present appeal of the appellant.

Learned counsel for the respondent No. 2 Sh. Rajinder Dorian Punj submits

that even though, under the award, respondent No. 2 is also entitled to 1/3 rd

share in the factory land of PSPL at Kalkaji, it is being deprived of the same.

It is submitted that the appellant is occupying about 25% of the said land and

exploiting the same, whereas respondent No. 1, represented by respondent

No. 3 is occupying the remaining about 75% and exploiting the same. He

places reliance on Section 26 of the Transfer of Property Act to submit that

the conditions imposed in the second award for transfer of the factory land at

Kalkaji of PSPL stand fulfilled, and that the possession thereof should be

equally divided between the appellant, respondent No. 2 and respondent

No.3.

25. On a query from the Court as to why the appellant or respondent

No. 2 have not initiated proceedings for winding up of the PSPL, learned

counsel for the appellant has informed that since the factory land of PSPL at

Kalkaji (to the extent of 3 Acres) is under a lease from the authorities, and

there is a dispute with regard to conversion charges and transfer charges for

the entire land which admeasures about 10 Acres (including the land

admeasuring 3 Acres duly allotted to PSPL), until and unless the allotment

of the entire land is regularized and converted into freehold, respondent No.

1/PSPL cannot be wound up as the same would put the entire property into

jeopardy. Learned counsel for the respondent No. 2 has responded to by

stating that respondent No. 2 does not have the requisite shareholding in

PSPL to be able to take any action for winding up of PSPL.

26. The appeal is primarily opposed by Mr. Naresh Thanai, who

appears on behalf of respondent No. 1 as well as respondent No. 3. He seeks

to place reliance primarily on Clause 14 of para 3.1 of the second award by

submitting that only on winding up of PSPL, the factory land shall belong to

Sh. V.P. Singh of Group „A‟, Sh. R.P. Punj of Group „C‟ and Sh. N.P. Punj

of Group „D‟ in equal ratio. Till so long as the company PSPL is not wound

up, the appellant has no right to seek partition of the said land by metes &

bounds and possession thereof to the extent of 1/3rd. He further submits that

the execution petition is barred by limitation. He submits that the second

award was made „rule‟ of the Court upon dismissal of the objections by the

learned Single Judge on 30.05.1997 in Suit No. 327A/1990. Merely because

an appeal from the said judgment was pending and the appeal came to be

dismissed by the Division Bench on 03.03.2009, the limitation for preferring

the execution petition did not stop to run from the date on which the award

was made a „rule‟ of the Court, as there was no stay operating in the appeal

with respect to the judgment of the learned Single Judge dated 30.05.1997

making the award a „rule‟ of the Court. He has sought to place reliance on

the decision of the Hon‟ble Supreme Court in Manohar Shankar Nale &

Others Vs. Jaipalsing Shivlalsing Rajput & Others, AIR 2008 SC 429, in

support of this submission. He submits that even though the issue of

limitation was raised by him before the learned Single Judge, the said issue

had not been gone into by the Court. He submits that the limitation for

preferring the execution petition under Article 136 of the Limitation Act was

twelve years, which expired before the filing of the execution petition.

27. We proceed to first consider the submission of Mr. Thanai that the

execution petition was barred by limitation. Firstly, we may notice that even

though the said issue of limitation was raised by respondent nos.1 and 3, the

executing court did not return a finding thereon. Inspite of that being the

position, the said respondents neither preferred a review nor an appeal before

this Court. Since the executing court did not dismiss the execution petition

on the ground of limitation, it means that the said objection of respondent

nos.1 and 3 was not accepted. Not having preferred a review or an appeal

from the impugned order, in our view, it is not open to the respondent nos.1

and 3 to now argue as respondents that the execution petition was barred by

limitation. In any event, we have considered the said submission on merits

and we find no merit therein.

28. Under Article 136 of the Limitation Act, period of limitation for filing

of an execution petition of a decree begins on the date on which it becomes

enforceable. It is well settled that an appeal is a continuation of the original

proceeding and the original decree merges in the appellate decree. When an

appeal is preferred from an original decree, the decree would also become

enforceable after dismissal of the same, and it is immaterial that there was no

order staying the execution of the decree and that the decree-holder could

execute the decree even during pendency of the appeal. This merger of the

original decree into the appellate decree takes place irrespective of the fact

that the appellate court affirms, modifies or reverses the lower court‟s

decree. [See Posani Ramachandraiah vs. Daggupati Seshamma, AIR 1978

AP 342; S. Kharak Singh vs. Harbhajan Singh, MANU/PH/0303/1878;

Ramji Dass vs. Tilak Raj, MANU/PH/0427/1988; Syed Abdul Rauf vs.

Nurul Hussain & Ors., AIR 1992 Raj 3; Hari Singh vs. Harbhajan Singh,

AIR 2001 P&H 108; Chandi Prasad & Ors. vs. Addl. Dist. and Sessions

Judge, Hapur & Ors., AIR 2001 All 229; Indradeo Sah vs. Ram Naresh

Sah & Ors., 2002 (1) PLJR 423; Nawal Kishore Patel vs. Most. Indrapari

Devi, 2002 (4) PLJR 272; Uma Shankar Sharma vs. State of Bihar, AIR

2005 Pat 94].

29. In Uma Shankar Sharma (supra), the Patna High Court has

observed as follows:

"8. Article 136 of the Limitation Act, 1963, specifically provides that the time from which period of limitation begins to run is when the decree of order becomes enforceable. In a case where the decree of the Lower Courts is challenged in Second Appeal which results into a decree passed by this Court, then the decree of the Courts below merge with the judgment and decree of the Second Appeal and the decree becomes enforceable and the period of limitation under Article 136 of the Limitation Act is to be counted from the date of the judgment in the Second appeal. Even when the appeal is dismissed on any preliminary matter or is dismissed for default, it would naturally; amount to confirmation of the judgments and degree of the Lower Courts, which would attain finality only thereafter and hence the final decision would be that of the second appellate Court and the decree of the Courts below could be legally treated as enforceable only thereafter. It would thus be absolutely immaterial that there was no order in the Second Appeal staying execution of the decree and that the decree of the Courts

below could have been executed by the Decree-holder immediately after the said decree.

x x x x x x x x x x

10. Furthermore, so long as there is any question sub-judice between the parties, those affected shall not be compelled to pursue the so often thorny path of execution which, if the final result is against them, may lead to any disadvantage. Nor in such case as this is the judgment-debtor prejudiced as he has indeed obtained a boon of delay which is so dear to debtors and if the judgment-debtor is virtuously inclined, there is nothing to prevent his paying what he owes into Court, specially when in this case the judgment-debtor is a welfare State".

30. The period of limitation, thus, for execution also begins from the date

of the decision of the appellate court.

31. The decision in Manohar Shankar Nale (supra) does not advance

the case of the respondent. In that case, the material factual difference was

that the decree holder sought to place reliance on the pendency of the review

petition to claim that the limitation started upon disposal of the review

petition. The Hon‟ble Supreme Court did not find favour with the

submission, for the obvious reason that a review, unlike an appeal, does not

tantamount to continuation of the original proceedings.

32. In the present case, the appeal against the judgment dated 30.05.1997,

whereby the award was made „rule‟ of the court, came to be dismissed by

this court on 03.03.2009. The period of limitation for preferring the

execution thus, began from 03.03.2009. The execution petition was preferred

by the respondent herein within the said period i.e. on 30.06.2009.

Consequently, the same was not barred by limitation. Accordingly, the plea

of the appellant of the execution petition being barred by limitation stands

rejected.

33. The above narration of the manner in which the properties and

businesses being run by the family were treated by the parties and, with their

consent, by the learned Arbitrators while making both the awards clearly

shows that the parties did not consider the closely held private limited

companies held by them to be separate juristic entities, rather they were

treated as partnership concerns and upon the consent of the parties, the

learned Arbitrators lifted the corporate veil of the closely held private limited

companies. The learned Arbitrators were thus not inhibited by the mere

cloak donned by various business entities as that of a company registered

under the Companies Act, 1956. The learned Arbitrators were given the

freedom to equitably distribute the shareholdings in the companies distinctly

from the assets held by them. We have set out the relevant clauses of the

reference dated 09.10.1989 which clearly shows that the parties

contemplated that, to achieve an overall settlement, reallocation of their

assets may be necessary and so as to meet any possible subsequent objection

on the ground that the companies are separate juristic entities and not bound

by such reallocation of assets of companies, the Board of Directors and

shareholders of the various companies passed resolutions agreeing to

consider themselves to be bound by the directions given by the sole

Arbitrator. The mode and manner of division & distribution of the

ownership, management and business of companies envisaged that the

Arbitrator may give appropriate directions for transfer of properties, transfer

of shares, interest and other matters as deemed necessary. Therefore, there

was no impediment in the Executing Court in lifting the corporate veil and

treating PSPL as a partnership concern and distributing its assets in terms of

the award.

34. The award, on the one hand, provides that PSPL shall continue to exist

and run its business under the chairmanship of Sh.V.P. Punj and Sh. S.N.P.

Punj, Managing Director. It also provides that on winding up of PSPL, the

factory industrial land shall be divided, as aforesaid, in three equal shares.

On the other hand, it also provides that 1/3 rd share in the factory land at

Kalkaji shall go each to Group „A‟, Group „C‟ and Group „D‟.

35. Merely because the company PSPL continues to exist in terms of the

award, it does not mean that the said factory land at Kalkaji belonging to

PSPL could not be distributed in equal ratio between Groups „A‟, „C‟ & „D‟.

The title of the company PSPL in respect of the entire factory land at Kalkaji

has not yet been perfected as disputes are stated to be pending with the

Government authorities. Moreover, the 3-Acre land allotted to PSPL is held

by it on leasehold basis. Obviously, the said land cannot be transferred or

hired of by PSPL to give legal effect to the distribution of the factory land as

envisaged in the award. That, however, in our view, should not have

inhibited the Executing Court from directing provisional physical

demarcation of the factory land at Kalkaji for distribution amongst the

Groups „A‟, „C‟ & „D‟ so that each of them could use, exploit and enjoy, in

the meantime, the said factory land in equal shares. Otherwise, it has been

leading to, and would continue to lead to a highly inequitable situation not

contemplated under the award, with respondent No. 3 enjoying about 75% of

the said factory land and the appellant enjoying about 25% of the said

factory land, and respondent No. 3 being completely ousted therefrom. The

provisional division and distribution of the said factory land does not militate

against the continued existence of PSPL. In our view, on a complete reading

of the award, it is clear that the learned Arbitrator also envisaged the said

course of action to be adopted as, otherwise, the group holding majority

shares and Directors in PSPL could take control of the entire factory land at

Kalkaji and defeat the distribution of the said factory land as envisaged

under the award, particularly when the award provides for the continued

existence of PSPL. In our view, clause 14 of para 3.1 of the award, which

provides that on winding up of PSPL the factory industrial land at Kalkaji

shall belong to Groups „A‟, „C‟ & „D‟ means that upon such winding up, the

legal title to the said land was to be transferred to Groups „A‟, „C‟ & „D‟,

However, the said clause does not contra indicate the actual physical

provisional division of the said factory land for use, enjoyment and

exploitation by the said three groups till so long as PSPL continues to exist.

36. There can be no doubt that the assets of a company cannot be de jure

transferred without completing the procedure prescribed by law, i.e., by

obtaining directions from a competent Court constituted under the

Companies Act, 1956. However, when the award distributes the factory land

belonging to the company PSPL amongst the three groups in equal shares, it

is open to one or the other group, who wishes to enforce the said direction to

require the others to take all steps necessary for effectuation of the award

both, in letter & spirit.

37. Accordingly, we allow the present appeal, set aside the impugned

order and restore the execution petition to its original number. We direct that

the factory land at Kalkaji belonging to PSPL be provisionally divided in

three equal shares by metes and bounds and be allocated to Groups „A‟, „C‟

& „D‟, either as mutually agreed upon by them, or by draw of lots.

38. To give effect to the aforesaid directions and for passing further

orders, the parties should appear before the Executing Court on 14.09.2012

39. The appeal stands disposed of leaving the parties to bear their

respective Costs.

(VIPIN SANGHI) JUDGE

(SANJAY KISHAN KAUL) JUDGE SEPTEMBER 06, 2012 sr