Delhi High Court
Yogesh Jain & Anr. vs Rakesh Jain &Ors.; on 18 April, 2017
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. 455/2012
Reserved on: February 28, 2017
Date of decision: April 18, 2017
YOGESH JAIN & ANR. ... Petitioners
Through: Mr. Avadh Kaushik, Mr Pankaj Kumar, Mr.
Devashish Maharishi & Mr. Dheeraj Kumar,
Advocates.
versus
RAKESH JAIN &ORS. ... Respondents
Through: Respondent Nos.1, 3 & 4 in person.
AND
+ O.M.P. 688/2012
APOORVE JAIN ...Petitioner
Through: Mr. Avadh Kaushik, Mr Pankaj Kumar, Mr.
Devashish Maharishi & Mr. Dheeraj Kumar,
Advocates.
versus
RAKESH JAIN & ORS. ...Respondents
Through: Respondent Nos.1, 3 & 4 in person.
CORAM: JUSTICE S. MURALIDHAR
JUDGMENT
% 18.04.2017
1. These are two petitions under Section 34 of the Arbitration and
Conciliation Act, 1996 („Act‟) challenging the impugned interim award
dated 1st April 2010 passed by the learned sole Arbitrator in the disputes
between the parties. While OMP No. 455 of 2012 has been filed by Yogesh
Jain (Petitioner No. 1) and Preeti Jain (Petitioner No. 2), OMP No. 688 of
2012 has been filed by their son Apoorve Jain. The Respondents in both the
petitions are Rakesh Jain (Respondent No. 1), his wife, Shabnam Jain,
(Respondent No. 2), Abhinav Jain (Respondent No. 3) and Akshat Jain
(Respondent No. 4). Respondent No. 3 and 4 are sons of Respondent Nos. 1
and 2.
2. The background to the present petitions is that Yogesh Jain (Petitioner
No.1 in OMP No. 455 of 2012) and Rakesh Jain (Respondent No. 1 in both
petitions) are brothers. They are the sons of late Mr. Narendra Kumar Jain.
Their mother is Smt. Savitri Jain.
3. The case of Yogesh Jain is that late Mr. Narendra Kumar Jain and Preeti
Jain (Petitioner No. 2 in OMP No. 455 of 2012) constituted a partnership
under the name and style of „Vardhaman Udyog‟ by a partnership deed
dated 29th August 1983. On 18th April 1986, Smt. Shabnam (Respondent No.
2 in both petitions) was inducted in the above partnership deed. Late Mr.
Narendra Kumar Jain purchased two plots measuring 200 sq. yds and 151-
1/2 sq.yds respectively in Khasra No. 630, Village East Gokalpur, Loni
Road Ilaka Shahdara, Delhi on 28th December 1987 from Smt. Kanta w/o
Shree Chand Gupta. Late Mr. Narendra Kumar Jain further executed a
power of attorney („PoA‟) in favour of Rakesh Jain on 5th October 1990.
4. Mr. Narendra Kumar Jain expired on 13th January 1992. Thereafter Preeti
Jain and Shabnam Jain constituted the partnership by new partnership deed
executed on 17th January 1992 effective from 14th January 1992. Shabnam
Jain retired from the partnership and her husband Rakesh Jain was admitted
to the said partnership on 1st April 1992.
5. Rakesh Jain sold the said property properties to Vardhman Udyog by two
registered sale deeds dated 9th October 1996 and 11th October 1996.
Vardhman Udyog deposited Rs. 4,05,000 with DSICD on 4th November
2000 for allotment of an industrial plot. Rakesh Jain retired from firm
Vardhman Udyog by a retirement deed dated 22nd August 2001. In terms
thereof "the assets of the firm were agreed to be taken over by Smt. Preeti
Jain as book value as on 31st March 2001and a sum of Rs. 21 lakhs was paid
to Rakesh Jain by Preeti Jain as his share in full and final settlement of all
his claims." The factories on the said properties had to be closed down as
they were in a non-conforming zone in terms of the orders of the Supreme
Court of India.
6. The case of Rakesh Jain was that he, his brother Yogesh Jain and father
late Mr. Narendra Kumar Jain used to look after the business. This included
the factory at Gokalpur. His brother Yogesh Jain used to sit in the office
situated at their residence 7/33, Ansari Road, Darya Ganj, New Delhi. Their
total business was joint business and factories were at Gokalpur, Gurgaon
and Orissa. Rakesh Jain used to manage all these factories and Yogesh Jain
looked after the office.
7. In 2002, some family dispute arose between the two brothers. Mr. Onkar
Mal Jain, maternal uncle of both Yogesh Jain and Rakesh Jain was
appointed as the sole Arbitrator to resolve their disputes. This was done by
an agreement dated 7th June 2002 which was signed by all the parties, i.e.,
Yogesh Jain and his wife, Preeti Jain and Rakesh Jain and his wife Shabnam
Jain. In this document both the parties gave their address, i.e., 7/33, Ansari
Road, Darya Ganj, New Delhi-110002. In the said document, it was stated
that:
"all his decisions will be completely acceptable to us and will be
binding upon us (including family) in necessary manner. In case the
arbitrator considers it appropriate and necessary to take the advice of
any other person/relative, then he can do so and no party can raise any
objection in this regard.
The decision can be given in whole or also in part; as the arbitrator
may deem to be appropriate or practical and no party can raise any
objection in this regard.
We declare that we have no personal property or businesses and in
case anything is found, then that shall also be a subject matter of
partition."
8. On the very next day, i.e., 8th June 2002 the parties signed a document
titled „Aapsi Samjhota Aalekh‟(Mutual Settlement Script) in which it is
stated that after holding discussions with both the parties the learned
Arbitrator unanimously decided that first of all immovable and known land
and property should be distributed and thereafter the business should be
distributed. It was noted that Rakesh Jain gave a proposal to Yogesh Jain for
choosing any share out of his list. Yogesh Jain after discussion with his
family chose a share and with mutual consent and settlement, properties
were divided. The document further stated that both the parties decided that
"the partition which has already been made should be put in writing for its
utilization in future". It was made clear that this script was being written
only on account of the partition that had already taken place.
9. In terms of above settlement, Smt. Savitri Jain (mother of both Yogesh
Jain and Rakesh Jain) would have the exclusive ownership of current place
of residence, i.e., two rooms attached with the bathroom, which would
remain with her for her whole life. There would be a joint toilet in the flat
and passage for ingress and egress. It would always remain available for
utilization without any hindrance. The toilet and bathroom in the outer room
situated at the first floor in the flat would remain only for her utilization. The
room situated in the ground floor and the toilet and bathroom would also be
available for utilization.
10. Thereafter the document listed out the list of properties which would go
to the share of Yogesh Jain. There were six immoveable properties included
in this list. Paragraph 3 of the document set out the properties that fell to the
share of Rakesh Jain which was seven properties. Para 4 of the document
talked of the extension portion situated at South-West side of House No.
4525-A situated at 7/33, Ansari Road, Darya Ganj, New Delhi which joins
with North-West side of House No. 4512-A and about 5‟x‟4‟ left over place
would be turned into toilet. The left over additional would be considered in
the share of Rakesh Jain and he was free to utilize it for any other purpose.
11. On 9th June 2003 Approve Jain made a declaration before the Arbitrator
that he would also be bound by the arbitration being adjudicated by the
arbitrator and for that purpose "my individual property and money shall be
deemed to belong to my father‟s family." On 9 th June 2003 a joint
declaration was given by both the parties, i.e., Yogesh Jain , Preeti Jain,
Apoorve Jain , Rakesh Jain and Shabnam Jain in writing and signed by all
of them. It was to the effect that all the liabilities of Rishabh Electrical
Private Limited (REPL) which was promoted by the joint and entire family,
including existing or contingent or arising in future relating to the period till
the time is taken up by either family or any member shall be shared by both
families in equal proportions. Likewise the liabilities of Aadi India Private
Limited („AIPL‟) would also be borne in equal proportion by both the
brothers, Rakesh Jain and Yogesh Jain. It was further declared that M/s.
Vardhaman Udyog, M/s. Veer Insulations, M/s. Veer Industries, M/s. Focus
Impex Private Limited, M/s. Farz Time Trading Private Limited, M/s.
Century Electricals Private Limited and M/s. Colour Stone Private Limited
were joint family group concerns. Their liabilities were to be borne in equal
proportion "except as already decided on 23/06/2002."
12. Mr. Onkar Mal Jain resided in Calcutta and he visited Delhi to hold
meetings several times. He is supposed to have had discussions with all the
parties including common relatives. He passed an interim order on 14th
October 2004 whereby Yogesh Jain was directed to produce the accounts.
However, Yogesh Jain declined to do so. He had also refused to sign the
Minutes of the arbitration proceedings. The learned Arbitrator noted that the
conduct of Yogesh Jain was not bonafide and that an adverse inference was
likely to be drawn against him for non-production of accounts and evasion
from participating in the arbitration proceedings. The learned Arbitrator
noted that Yogesh Jain had submitted that he was not inclined to manage
and control the companies and also expressed his inability to do so. Further,
the bank loans now were to the tune of several crores. Yogesh Jain stated
that those had become unmanageable and nothing could be done. Instead
Rakesh Jain had expressed his willingness to manage the affairs with the
help of his relatives and promised to bear the increase in the liability. By the
interim order the learned Arbitrator directed that the management and
control of REPL and AIPL to be handed over to Rakesh Jain. He would be
free to induct himself and/or his nominees Mayank Jain and Mr. Aridaman
Kumar Jain respectively on the Board of Directors („BoD‟) of both the
companies with immediate effect. He or his nominee were authorized to sole
represent both the companies before Banks, Registrar of Companies,
government and other statutory or local authorities for all purposes. Yogesh
Jain was directed to hand over to Rakesh Jain every record and other things
in his possession in relation to the said companies for smooth conduct of the
companies by Rakesh Jain within three days of the receipt of this order
under advice to the learned arbitrator except the records relating to the filing
of income tax returns and RCO returns which may be handed over after
filing of the same as soon as possible. It was ordered that any
communication to the learned Arbitrator has to be sent only through
registered AD post. The learned Arbitrator restrained Yogesh Jain and any
member of his family from representing on behalf of either of the
companies. It was further directed to the parties and also their
nominees/representatives or any other claiming title under them that no part
of their assets or properties shall be alienated, parted with or transferred in
any form whatsoever without any prior consent in writing or further
directions in that regard. It was mentioned that the above directions were
imperative for preserving and managing the subject matter of reference until
the final award was passed. The above interim order was announced in Delhi
on 14th October 2004.
13. This interim award was sent to Yogesh Jain at his address, i.e, 7/33,
Ansari Road, Darya Ganj, New Delhi. The arbitral record contains an AD
card which showed that the said interim award was received by Yogesh Jain
on 18th October 2004. An affidavit dated 30th November 2012 was filed in
which Yogesh Jain admitted that he had received a communication from Mr
Onkar Mal Jain on 18th October 2004.
14. On 26th July 2006 both Yogesh Jain and Akshat Jain, sons of Rakesh
Jain gave a declaration before the learned Arbitrator that their respective
individual properties and money would be deemed to belong to the family of
Rakesh Jain.
15. On 30th August 2007 the learned Arbitrator sent a letter to both the
parties fixing the meeting on 3rd September 2007 at 10 am at 7/33, Ansari
Road, Darya Ganj, New Delhi. A letter was sent to both the parties, i.e.,
Yogesh and Rakesh by speed post. There was no response to the said letter.
16. As noted by the learned Arbitrator in the impugned interim award dated
1st April 2010 that the sales tax matter in High Court of Orissa remained
undecided for a long time. The impounded/seized amount was of several
crores. The Government of Orissa has gone in appeal against the orders of
the High Court of Orissa to the Supreme Court of India which rejected the
special leave petition filed by them. That order had become final. The
learned Arbitrator further noted as under:
"It transpired during my July 2006 visit to Delhi that although the
value of entire assets (pledged and non-pledged) may possibly be just
sufficient to meet the bank dues but will fetch much less if auctioned
by the bank and definitely much insufficient to settle the bank dues
that way. The only just and viable option of bidding for „taking over
both the existing businesses i.e., REPL and AIPL and all the
known/accepted immovable landed properties (excluding only
Daryaganj landed properties) on as is where is basis against taking
over all the past present future and contingent liabilities of all the past
and existing businesses and only after getting the other party‟s family,
their mother and relatives of such other party discharged from all the
liabilities and guarantees provided‟ was thwarted by refusal of
Yogesh Jain to participate in bidding although the same had been
categorically agreed, accepted and decided the previous day. My
Delhi visit in September 2007 was infructuous as the meeting could
not take place due to somewhat cogent reasons".
17. Thereafter, as noted by the learned Arbitrator, Rakesh Jain had been
pressing hard to finalize the arbitration as he was facing difficulties in
arranging funds for settling the bank dues. The prospective lenders were
demanding the pledge of shares and personal guarantees of all the directors.
These conditions could not be met in absence of proactive cooperation of
Yogesh Jain which was not forthcoming.
18. Since despite repeated opportunities, no settlement could be arrived at by
the parties, the learned Arbitrator considered it appropriate to give a last
opportunity to both the parties to make their submissions. The learned
arbitrator directed both the parties to submit written claims along with all the
documents with respect to the claims within two weeks from receipt of letter
dated 18th March 2008 sent by the learned Arbitrator to both the parties. In
the said letter he stated that he had received a claim from Rakesh Jain but
nothing from Yogesh Jain. He informed them that the next meeting would
take place at 3 pm on 19th September 2008 at his residence at Kolkata in
terms of the order dated 9th May 2008. One last opportunity was granted to
Yogesh Jain to submit his claims.
19. In the said letter, the address of both the parties was indicated as 7/33,
Ansari Road, Darya Ganj, New Delhi - 110 002. Placed on record it
recorded a copy of the said letter and postal receipt.
20. As noted by the learned Arbitrator, in the impugned interim award dated
1st April 2010, a letter was received on 8th May 2008 by him from Rakesh
Jain seeking exemption from personal presence on 9 th May 2008 on account
of some urgent work at the Gurgaon Court. In the minutes drawn up on that
date, the learned Arbitrator noted that none appeared on behalf of the
parties. Yogesh Jain had still not filed any claim nor any counter-statement
to the claim of Rakesh Jain. Proceedings were kept in abeyance to enable the
parties to comply with the directions and for crystallization of dues of the
banks.
21. The learned Arbitrator noted that recently it was reported that the
liability in relation to AIPL was crystallized and in relation to REPL also it
was at an advanced stage. The learned Arbitrator noted that "any more delay
may become fatal for them and they stand to lose everything." The learned
Arbitrator noted that as neither party was able or interested in arranging to
meet his half portion of liabilities and the liabilities seemed to be far more
than the price the entire assets would fetch in an auction, the only option left
was that:
"the highest bidder party take over all the past and present business
companies, firms, and concerns (excluding already mutually settled
and taken over companies for doing personal business - Century
Electricals Pvt Ltd & Focus Impex Private Ltd by Yogesh Jain and
Mahavir Transmission Udyog Pvt Ltd & Shree Krishna Metals &
Minerals Pvt Ltd by Rakesh Jain) and all the known immovable
properties (which were mutually partitioned on 7th June 2002)
excluding Daryaganj properties (which shall, for the time being,
remain with parties as per their said mutual settlement of 7 th June
2002 as recorded on 8th June 2002) on as is where is and whatever is
basis against taking over of all the past present future and contingent
liabilities relating to their past and present business in the order and
subject to the following conditions and safeguards : (i) First of all the
successful bidder has to get his mother and the other party (including
his family &relatives) discharged from personal guarantees given,
against business loans and advances, to financial institutions and the
banks within a stipulated period, (ii) Thereafter he will become owner
of all the aforesaid business and immovable properties, (in) As an
interim measure, the successful bidder will pay a sum of Rs.12.000/-
per month (to be increased by Rs.2,000/- after every twelve months)
to her mother towards her maintenance and, in addition, also bear/pay
any medical expenses incurred for her treatment until her due share is
given to her after finalisation of accounts. (iv) Whenever called upon
to do so by the undersigned, the successful party must be ready to
make a cash deposit of upto rupees fifty lacs only in favour of his
mother Smt. Savitri Jain within 30 days thereof being the bare
minimum she is entitled to as her share in the joint family properties
in case nothing or only something could otherwise be made available
for her."
22. The learned Arbitrator noted in the proceedings drawn up before him on
9th May 2008 that the parties would have to appear before him in person or
through their duly authorized representative to bid for taking over the
properties and liabilities as aforesaid and in that he would allot the
properties and liabilities to the highest bidder and that the bid would start
from the minimum base price of Rs. 1 upwards. Both the parties were
directed to prepare and send the accounts in their possession „as soon as
possible.‟
23. The learned Arbitrator noted that as his daughter‟s marriage was fixed
on 12th July 2008 he got busy in his personal work. Thereafter he did not
want to take the matter as the marriage of daughter of Rakesh Jain was
already fixed for November 2008. Thereafter in December 2008 he was
hospitalized for heart problem and underwent a bypass heart surgery in
January 2009. Rakesh Jain stated to have call the Arbitrator in August 2009
asking him to expedite the arbitration. Rakesh Jain also sent a letter on 24 th
August 2009 to the learned Arbitrator.
24. The learned Arbitrator realised that inadvertently the minutes of the
meeting on 9th May 2008 had not been sent to the parties. This was sent with
the letter dated 29th August 2009 by speed post with acknowledgement due.
He has also sent an e-mail to both the parties. The entire text of the letter
dated 29th August 2009 is extracted in the impugned interim award dated 1st
April 2010. This letter was despatched on 2nd September 2009 by speed post
and also sent to Petitioner No. 1 through email [email protected]
and copy to Respondent No. 1 at [email protected] In the said
notice, the learned Arbitrator proposed to held a meeting on Saturday the
19th September 2009 at 3 pm at his residence at Kolkatta and the whole
address was set out in the letter. Both the parties were asked to remain
present either personally or through authorized representative for taking over
the properties and liabilities as stated in the minutes of meeting held on 9 th
May 2008 and the said properties and liabilities would be allotted to the
highest bidder and the bid would start from the minimum base price of Rs. 1
onwards. It is further stated therein that either party was not present in
person or through his duly authorized representative, at least two hours prior
to the stipulated time for hearing/bidding it would be deemed that he was not
interested in bidding.
25. In the impugned Award dated 1st April 2010 it was stated that in the
meeting held on 19th September 2009 while Rakesh Jain was present,
Yogesh Jain was not present. There was no communication either from
Yogesh Jain. At the auction Rakesh Jain bid Rs. 1 and expressed his
inability to upgrade the bid. Therefore, the bid of Rakesh Jain was
provisionally accepted and interim order was reserved. Rakesh Jain
submitted the bid price of Rs. 1 in cash which was provisionally accepted
but Rakesh Jain was then advised to try to reach an amicable settlement with
Yogesh Jain through the intervention of common relatives, i.e., Kashmirilal
Jain and Mr. Nirmal Kumar Jain.
26. On 29th March 2010 the learned Arbitrator received a letter dated 26th
March 2010 from Rakesh Jain intimating failure of his efforts to arrive at a
mutual settlement with Yogesh Jain. Further, the situation had deteriorated
as Haryana Financial Corporation Limited was stated to have completed the
auction of Shops 522-452, Ground floor, 7/33, Ansari Road, Darya Ganj,
New Delhi. Further it was stated that Debt Recovery Tribunal, Cuttack
(Orissa) had given AIPL one month‟s time from 12th March 2010 to make
payment failing which the proceedings for auction of AIPL would take
place. Since no further time could be wasted for any mutual settlement
among the parties, the learned Arbitrator proceeded to make the second
interim award (which is the award in the main petition). The learned
Arbitrator then noted as under:
"Whereas I have examined the records and find that unless the award
is passed now it will, in all probability, ruin the business permanently
and Smt. Savitri Jain who is a senior citizen and having failing health
will suffer seriously and the terms of auction had long been settled
and it is necessary to protect the interest of Smt. Savitri Jain though
she is not a party before me but on examination of the records I am of
the opinion her interest has to be protected apart from the business
getting a chance of survival and after considering the facts and
circumstances I have decided to pass an interim award."
27. The operative portion of the impugned interim award allotted to Rakesh
Jain, to the exclusion of all others, all the past and present business
companies, firms and concerns (excluding already mutually settled and
taken over companies, i.e., Century Electricals Pvt. Ltd & Focus Impex
Private Limited taken over by Yogesh Jain and Mahavir Transmission
Udyog Pvt Ltd & Share Krishna Metals & Minerals Pvt Ltd taken over by
Rakesh Jain) and all the known immovable properties (which were mutually
partitioned on 7th June 2002 and recorded on 8th June 2002) excluding
Daryaganj properties (which shall, for the time being, remain with parties as
per their said mutual settlement as recorded on 8th June 2002) (all the said
businesses and immovable properties more particularly and specifically
described in Schedule A hereinafter) on an as is where is and whatever is
basis against taking over of all the past present future and contingent
liabilities relating to their past and present businesses.
28. This was subject to the safeguards and conditions set out immediately
thereafter which included taking steps and to get his mother and Yogesh Jain
(including his family members and relatives) discharged from personal
guarantees given against business loans and advances to the financial
institutions and banks within a period 18 months from date. Upon
compliance with the above conditions, all the properties and shares in the
scheduled businesses standing in the name of Yogesh Jain including family
members and Yogesh Jain‟s business companies namely CEPL and FIPL
"shall forthwith be treated as transferred in favour of the successful bidder
Rakesh Jain." As an interim measure, Rakesh Jain would pay Rs. 12,000 per
month by 5th day of each month to his mother Savitri Jain starting from 1st
April 2010 towards her maintenance and in addition, also arrange, bear and
pay any medical expenses incurred for her treatment and as a first instalment
Rakesh Jain shall deposit a sum of Rs. 20 lakhs within one month in a fixed
deposit account with any scheduled bank in the name of Savitri Jain
(wherein she shall be the beneficiary during her life time) and after her
demise the money be made payable to Rakesh Jain. Further Rakesh Jain was
to deposit a further sum not exceeding Rs. 30 lakhs in one or more
instalments within a period of one month whenever called upon to do so
either by the undersigned or in the case of demise of Savitri Jain herself. In
default of compliance with any of the above conditions, the sale in favour of
Rakesh Jain shall stand cancelled. Rakesh Jain was directed to report
quarterly (starting from the quarter ending June 2010) to the learned
Arbitrator the compliance of the above conditions within the stipulated
periods. Schedule A to the Award listed out the properties of the business
concerns.
29. The said second impugned interim award dated 1st April 2010 was sent
by the learned Arbitrator to both the parties by speed post on 2nd April 2010
from Kolkatta. The addresses of both the parties are shown in the postal
receipt is 7/33, Ansari Road, Daryaganj, New Delhi. Placed on record, apart
from the postal receipt, registered AD cards stated to have been signed to
both Rakesh Jain and Yogesh Jain on 5th April 2010. Likewise, an email was
sent to both the parties on 7th April 2010. In the said email it was stated as
under:
"Mr. Yogesh Jain/Mr. Rakesh Jain
Take notice that I passed an interim order on 1 st April 2010 and sent
the same to both of you on 2nd April 2010 by speed post. Both of you
must have received that by now.
If you have not received the same by now, you may download the
attachment and get a copy of the said interim order or in the event of
failure of both these mode of delivery, you may contact me for
another copy which will be sent to you promptly."
30. On 18th May 2010 the learned Arbitrator sent a letter to both Yogesh Jain
and Rakesh Jain stating inter alia that it has come to notice recently that
email had been hacked by some unknown person and several absurd emails
were sent by the person to his several known persons and contacts. The said
letter reads as under:
"As far as my records of „SENT‟ emails show now, I have only sent,
after the year 2004, the following three emails to both of you in
connection with you your arbitration matter before me:
1. Notice fixing date of hearing on 3rd September 2007 at Delhi sent
on 31st August 2007 to Yogesh Jain (at email address
[email protected] - later this email address was stated by
Yogesh Jain as not belonging to him) with cc to Rakesh Jain (email
address [email protected]) .
2. Date fixing notice dated 29th August 2009 (without enclosure) sent
on 2nd September 2009 fixing the date of hearing on 19 th September
2009 at Kolkatta sent to Yogesh Jain at [email protected]
with cc to Rakesh Jain at [email protected]
3. Email sent on 7th April 2010 (intimating passing of an interim
award on 1st April 2010 and sending by speed post on 2 nd April 2010)
to Yogesh Jain at [email protected] with cc to Rakesh Jain at
[email protected] attaching copy of the interim award.
In case either of you have received any other email from me relating
to your arbitration matter, you are hereby required to send a copy of
the same by email to me and a copy by registered post to me
immediately to enable me to take action for the mischief done by the
hacker and treat the same as not sent by me and having no legal
effect."
31. The case of Rakesh Jain is that Yogesh Jain accepted the above interim
award dated 1st April 2010. As on that date the liabilities were about Rs. 50
to Rs. 55 crores. Rakesh Jain stated to have taken steps in the High Court of
Orissa at Cuttack, the High Court of Punjab and Haryana and the Supreme
Court of India to get the liabilities of REPL and AIPL reduced. The Central
Bank of India, Darya Ganj and Bhubaneswar had handed over the liabilities
of Rs. 12 crores to ASREC Mumbai and Rakesh Jain had paid Rs. 175 lakhs.
The remaining was to be paid on 31st December 2011.
32. On 7th October 2011 Rakesh Jain wrote to the learned Arbitrator
requesting time till 31st March 2012 for compliance of his obligations under
the interim Award. By the communication dated 19th October 2011
addressed to Rakesh Jain with cc to Yogesh Jain (by speed post), the learned
Arbitrator granted time till 31st March 2012 for making full payment of the
remaining liabilities of banks and financial institutions and to get Savitri Jain
and Yogesh Jain (including his family members and relatives) fully
discharged from personal guarantees for the business loans and advances.
Rakesh Jain was also reminded that a copy of the said letter should have
been sent to Yogesh Jain by registered post or speed post and the proof
thereof ought to have been sent to the learned arbitrator along with the letter.
The postal covers for the despatch by speed post were returned with the
remarks „not found‟.
33. On 17th November 2012 Rakesh Jain and Shabnam Jain filed Execution
Petition No. 308 of 2011 before this Court for execution of the interim
Award dated 1st April 2010. The Court issued notice on 23rd November 2011
to the Petitioners herein and their son Apoorve Jain. Apparently on receipt
of the notice from the Court, the Petitioners filed OMP No. 455 of 2012
challenging the interim Award. Pursuant to the notice issued in the present
petition on 11th May 2012 Mr. Vivekanand, learned counsel appeared on
advance notice for the Respondents. Learned counsel for the Petitioners
contended that a copy of the impugned interim Award was received only on
7th February 2012, which fact was seriously disputed by Mr. Vivekanand. In
the circumstances, the Court requisitioned the arbitral record for the next
date.
34. At the hearing on 20th September 2012 the Court passed the following
order:
"1. The arbitral record received in a sealed cover has been opened in
the Court. Learned counsel for the parties have inspected the arbitral
record in the presence of their respective clients.
2. Learned counsel for the parties wish to file affidavits explaining
about some of the documents in the arbitral records. They are
permitted to file their respective affidavits within four weeks.
3. The arbitral record be put back in a sealed cover by the Registrar.
In the event, learned counsel for either party seeking to inspect the
record, inspection will be permitted by the Registrar by opening the
seal and re-seal it again after inspection.
4. List on 4th December 2012 along with Execution Petition No. 308
of 2011 and OMP No. 688 of 2012."
35. Pursuant to the order dated 20th September 2012 both Yogesh Jain and
Preeti Jain filed their respective affidavits. The main points in each affidavit
were:
(i) they came to know of the interim Award dated 1st April 2010 only
on 7th February 2012 when their counsel was served with a copy of
Execution Petition No. 308 of 2011 filed by the Respondents. The
present petition was filed within three months from the date of receipt
of the photocopy of the interim Award;
(ii) As far as Yogesh Jain was concerned, it was asserted that the
signatures of the AD card in support of despatch of a copy of the
Award by speed post, did not match with his signature especially
when compared with his signature on the AD card of 18th April 2004
and in the affidavit filed by him in the present petition.
(iii) Pursuant to the order of the Court, the sealed record was
inspected by the Petitioners on 9th and 10th October 2012 though the
Petitioners had requested certified copes since no order in fact had
been passed, they had been furnished to the Petitioner;
(iv) Preeti Jain stated that she did not find any Award or order being
addressed to her. Neither in the interim order dated 14th October 2004
nor in the interim Award dated 1st April 2010 did her name appear.
There was no covering letter to these documents to show that these
were ever marked and addressed to her at her address of 4525A, 7/33,
Ansari Road, Darya Ganj, New Delhi- 110002. Even in the
documents in Index II labelled "minutes/proceedings/notings/steps"
her name did not figure. She also claimed that she had neither given
any General Power of Attorney (PoA) nor any authority to her
husband Yogesh Jain to either represent her in mediation proceedings
or to file/receive any documents. She claimed that in the Hindi
document titled „Panch Niyukti Patra‟ the expression "Yogesh Jain
evam Pariwar" and "Rakesh Jain evam Pariwar" were interpolated
later on. The appointment letter was only by Yogesh Jain and Rakesh
Jain. She had signed it only as a witness. She had not authorized
anyone to act as an Arbitrator.
(v) Preeti Jain stated in her affidavit that she was not aware of the
document dated 8th June 2002. Yogesh Jain had not signed this
document. Her signatures appearing on it have been forged. Copy of
this document was never handed over to Yogesh Jain or her. Index IV
document or Index II documents did not refer to the said document
dated 8th June 2002 and was also silent about the proceedings that had
taken place during 5th June 2002 to 9th June 2002.
(vi) As regards the declaration dated 9th June 2003 it was claimed by
Preeti Jain that the declaration was taken from her son without her
knowledge and on the premise that since he had attained majority, and
the joint family HUF property having been settled between his father
and Rakesh Jain, his declaration would be of great importance. Preeti
Jain further claimed that she was made to sign on the blank paper on
which the text was written later on. Even the date under the signatures
was put by somebody else. She further offered an explanation by this
time that Farz Time Trading Private Limited (FTTPL) had been
renamed as Mahavir Transmission Udyog Private Limited (MTUPL).
In the declaration the old name of FTTPL was appearing. However
MTUPL was incorporated on 20th May 2003. However, in the
document dated 9th June 2003 there is no reference to MTUPL.
Therefore, the said document was not written on 9 th June 2003. The
document also referred to the decision taken on 23 rd June 2002 but
there is no such document appearing on that date. Even the signature
of Apoorve Jain was squeezed in between her signature and her
husband, Yogesh Jain. It was not the signature of Apoorve Jain. These
were forged signatures. She also claimed that the document D-9 of 9th
June 2003 was a blank piece of paper on which signatures of Preeti
Jain were taken. The signatures of Apoorve Jain was forged one and a
separate petition, OMP No. 688 of 2012 was filed by him. She further
stated that Index IV titled 'communication received‟ contained only
correspondence between Rakesh Jain and the learned Arbitrator and
none of them were marked as CC to Preeti Jain. She further
volunteered that a Company Petition No. 87(ND) of 2012 titled
[Rishabh Jain & Ors v. Aadi India (P) Limited & Ors.] wherein Preeti
Jain was arrayed as Petitioner No. 4 has been filed before the
Company Law Board (CLB), New Delhi under Sections 397, 398,
399, 402 and 403 of the Companies Act, 1956 on 9th July 2012 and
the said petition was sub judice.
(vii) In his affidavit Yogesh Jain reiterated that the documents sent by
the Arbitrator (referred to in the affidavit as „mediator‟) did not
contain any covering letter bearing the names, addresses, postal
addresses as well as emails of either the parties or the arbitrator.
Yogesh Jain does not dispute the receiving of the interim order dated
14th October 2004 but disputes having received any interim Award on
that date. He reiterated that he did not have the GPA of his major son
Apoorve Jain or his major daughter Km. Anupreksha Jain or his joint
family HUF agreeing to the arbitration and receiving of notice dated
30th August 2007 for the meeting of 3rd September 2007.
(viii) Yogesh Jain disputes having received letter dated 18th March
2008 or letter 14th April 2008. He states that a letter was sent in the
name of Yogesh Jain at 7/33, Darya Ganj, New Delhi, which address
was shared by Rakesh Jain (Respondent No. 1) as well. As regards the
letter dated 29th August 2009, he points out that the AD card
mentioning his name with the address 7/33, Darya Ganj, New Delhi
did not bear his signature. No copy of any letter sent by the Arbitrator
to any of the relatives, Shri Kashmiri Lal Jain, Shri Nirmal Kumar
Jain or Nirmal Kishore Jain asking them to conciliate between the
parties for the settlement of the disputes of the joint family properties
was found in the record.
(ix) Yogesh Jain points out the letter of 19 th October 2011 by the
Arbitrator granting extension of time to Rakesh Jain for compliance
upto 31st March 2012 was again sent to Yogesh Jain at 7/33, Darya
Ganj, New Delhi and was returned with the remarks „refused‟.
Further, since the address of both Rakesh Jain and Yogesh Jain which
was common, it is not known as to who had refused the receipt of this
letter. Yogesh Jain denies of having refused to accept this letter. He
states that the Arbitrator was in any event aware of the fact that
Yogesh Jain had been residing at 4525A, 7/33, Ansari Road, Darya
Ganj, New Delhi at which place at one time he had also proposed to
hold the meeting on 3rd September 2007 as is evidenced from the
document dated 30th August 2007. It is, therefore, not known why no
communication or correspondence was sent to the above address of
4525A, 7/33, Ansari Road, Darya Ganj, New Delhi.
(x) There was no evidence of the despatch of email dated 14th August
2004. Yogesh Jain denied of being in possession of any records of
REPL even prior to 2003-04. The document dated 8th June 2002 was
not doubt signed by Yogesh Jain but a copy thereof was never handed
over by the learned Arbitrator to him. He took the same stand as
regards title document dated 8th June 2002 as Preeti Jain and claimed
her signatures on the said documents were forged. Yogesh Jain states
that he gave his signatures on the blank papers only for the purpose of
division of the property (HUF). He denied that a mutual settlement
has been arrived at on 9th June 2003 or that any mutual
agreement/settlement dated 11th June 2003 was executed. He claimed
that the document dated 9th June 2003 was a forged document.
36. Rakesh Jain has also filed a separate affidavit in compliance with the
above order dated 20th September 2012. He listed out all the
documents/letters/emails along with the page numbers as mentioned in the
arbitral records. In his affidavit, Rakesh Jain enclosed documents to show
that Yogesh Jain had full knowledge of the arbitral proceedings. Yogesh
Jain had filed a police complaint on or about 29th September 2011 in the
matter of an alleged sale of immovable property at Khasra No. 630, Gali No.
1, East Gokulpur, Loni Road, Delhi. Having obtained a copy of the
investigation report under the Right to Information Act (RTI Act) Yogesh
Jain attached it to the objections in OMP No. 455 of 2012 as Annexure P-9.
Rakesh Jain disclosed that statement had been taken by the Investigation
Officer (IO) in which he had given the narration of events. He also informed
the IO of the arbitration award dated 1st April 2010 and that had been
delivered to Yogesh Jain and Rakesh Jain. Rakesh Jain had also handed over
a copy of the award dated 1st April 2010 to the IO. In the report of the IO,
these facts were mentioned. Inter alia it was shown that the IO had
confronted Yogesh Jain with his statement along with the documents
submitted him.
37. Rakesh Jain further pointed out that he and his family had to clear
liabilities of more than Rs. 40 crore. Only when all the liabilities were
settled and paid by him and all personal guarantees of Yogesh Jain and his
family were discharged, did Yogesh Jain come forward to file the present
objection petition. Yogesh Jain had re-directed the creditors to the door of
Rakesh Jain by referring to the impugned interim Award.
38. Rakesh Jain pointed out that Yogesh Jain had in his affidavit dated 30th
November 2012 stated that he had received interim Award dated 14th
October 2004 which was despatched at the same address, i.e., 7/33, Ansari
Road, Darya Ganj, New Delhi. There was no reason for Yogesh Jain not to
receive the interim award dated 1st April 2010 sent to the same address.
Yogesh Jain further pointed out in his affidavit that the sole Arbitrator was
their maternal uncle and was taking regular advice from the elders of the
family, i.e., Nirmal Kumar Jain, Nirmal Kishore Jain and Kashmirilal Jain
and also from Smt. Savitri Jain. All the family elders had talked to both the
parties before the finalization of the interim Award dated 1st April 2010.
The Arbitrator had received a joint communication dated 23rd March 2010
from the said family elders and a confirmation towards the contents of this
joint communication from Smt. Savitri Jain. Keeping this joint
communication in mind, the learned Arbitrator passed the impugned interim
Award dated 1st April 2010.
39. Rakesh Jain further stated: "all three of them and our mother had
numerous informal meetings with Sh. Yogesh Jain both before and after the
interim award dated 1st April 2010 in context of the award." He finally
submitted as under:
"I submit that from the above that it is clear that the interim award
dated 1st April 2010 was sent at the permanent postal address (which
was duly provided to the learned sole Arbitrator by Shri Yogesh Jain)
and undisputed email ID of Sh. Yogesh Jain, who has been
representing his family, i.e., his wife and children before the learned
sole Arbitrator like I was representing my family. Sh. Yogesh Jain
had received signed copy of award by speed post on 5 th April 2010 as
per page 5 to 32 of Index III of arbitral record and by email on 7th
April 2010 as per pages 15 of Index IV of arbitral record. Thus the
two sets of objections filed against the interim award dated 1 st April
2010 by Mr. Yogesh Jain and his family are liable to be dismissed as
they barred by limitation."
40. The present petitions were heard and written submissions were filed by
the parties. Orders were reserved on 26th March 2014. On 4th June 2014 the
learned Single Judge of this Court proceeded to pass a detailed order where
inter alia it was observed that:
"......it appears to the Court in view of documentary evidence
produced by the Respondent that the Petitioners had knowledge of the
passing of interim order and are taking full advantage of the situation
and the prescribed law. The presumption of service is doubtful and in
view of peculiar circumstances except to expedite the hearing of the
main petitions when this issue of limitation would also be kept in
mind while deciding the matter on merit."
41. The above order dated 4th June 2014 was appealed against by Rakesh
Jain before the Division Bench (DB) of this Court by filing FAO (OS) No.
343 of 2014. The said appeal was disposed of by the DB by its order dated
30th July 2014, the relevant portion of which reads as under:
"7. In our opinion the learned Single Judge has to first decide whether
the objections are within limitation. If the objections have not been
filed within limitation the same have to be dismissed for the reason no
application has been filed praying for delay in filing the objections to
the award be condoned.
8. We find that the objections have been listed for September 01, 2014
in the category of „Short Cause‟.
9. We dispose of the appeal directing that the learned Single Judge
would first hear arguments and decide whether the objections have
been filed within limitation. Depending upon the view taken
necessary orders would be passed in the OMP No. 455 of 2012 and
OMP No. 688 of 2012 filed laying a challenge to the award."
42. On 20th March 2015 the following order was passed by the Court in
OMP 455/2012:
"During the course of the submissions, the Respondent No. 4 has
drawn my attention to the documents annexed at pages 754 to 758,
purported to be a communication dated June 07, 2002 with 4 page
annexure sent by the Petitioner No. 1 to Sh. Onkar Mal Jain,
Arbitrator and having received by him to state that the same are
fabricated documents.
The Petitioner No. 1 who is present in Court was asked to produce the
original of these documents. He states that the same are not available.
One opportunity is given to Petitioner No. 1 to make available/trace
out the original documents. If he is unable to make available/trace out
the same, let an affidavit be filed by the Petitioners about authenticity
of the documents, including the signatures of Sh. Onkar Mal Jain on
the said documents.
Renotify the petition on 15th May 2015."
43. Thereafter, an affidavit was filed on behalf of the Petitioners. It was
observed by the Court in its order dated 15th May 2015 which reads as
under:
"1. Pursuant to the last order the Petitioners have filed their affidavits.
The Petitioner No. 1- Mr. Yogesh Jain has in para Nos. 5 and 6 stated
as under:
"5. The Deponent states that the photocopy of the letter
addressed by me to Shri Omkar Mal Jain on 7th June 2002 was
found by me in my records when the above Petition was to be
prepared and filed before this Hon'ble Court. The Deponent
further states that the said letter was handed over by me to my
uncle, Shri Onkar Mal Jain on 07th June 2002. The Deponent
further states that the said Shri Onkar Mal Jain acknowledged
receipt of the said letter along with its annexure by affixing his
signatures thereon.
6. The Deponent states that in terms of the Order dated 20th
March 2015 passed in the above Petition, the Deponent has
searched the files and papers at his office and his residence but
is unable to trace out the original of the said document being
the letter dated 7th June 2002 and is accordingly filing his
Affidavit to confirm the authenticity of the said document and
the signatures of Shri Onkar Mal Jain appearing thereon."
2. The petitioner No.2 has also filed an affidavit wherein she has in
para Nos.4 to 6 stated as under:-
"4. The Deponent states that the copies of documents filed
along with the above Petition were traced out and collated by
the husband of the Deponent (Petitioner No.1 in the above
Petition).
5. The Deponent states that the photocopy of the letter
addressed by Petitioner No.1 to Shri Omkar Mal Jain on
7/06/2002 was found by my husband from his records when the
above Petition was to be prepared and filed before this Hon'ble
Court. The Deponent further states that even though she does
not have any knowledge of any purported Arbitration
proceedings, the Deponent has been informed by her husband
that the said letter was handed over by Petitioner No.1 to his
uncle, Shri Omkar Mal Jain on 7/06/2002.
6. The Deponent states that in terms of the Order dated 20th
March 2015 passed in the above Petition, Petitioner No.1 has
searched the files and papers at his office and our residence but
is unable to trace out the original of the said document being
the letter dated 7/06/2002. Accordingly I am filing this
Affidavit to confirm the authenticity of the said document and
the signatures of Shri Onkar Mal Jain appearing thereon."
3. Whereas it is noted in the letter dated 24th December, 2012, Mr.
Onkar Mal Jain has stated as under:-
"On either 07/06/2002 or any other day, I did not receive any
letter re family asset list or any Assets List in excel format (4
pages) or any supplementary list in letter form from Mr.
Yogesh Jain. All the six photocopies sent by you (containing
my forged signatures) are fake and a matter for forgery. The
single page lists which were given by our and Mr. Yogesh Jain
are part of the arbitral record at pages 5 & 4 of Index-1
(Documents-D3 & D2). Mr.Yogesh Jain wrote his choice
(visibly unique handwriting) on computer printed D2 list given
by him. Now, he cannot deny the D2 list as given by him. If he
has chosen to invent any fake list and has forged my signature
on the same for misleading the Hon‟ble High Court, and as the
matter is already pending before the Hon‟ble High Court and
the arbitral record in Original is with the Hon‟ble High Court,
you just bring the same to the notice the Hon‟ble High Court
and I am sure the Hon‟ble High Court will take steps."
4. From the above, it appears that the stand of the petitioners is at
variance with the stand of Mr. Omkar Mal Jain in his letter dated
December 24, 2012. A response on the affidavits filed by the
petitioners need to be called for from Mr. Onkar Mal Jain.
Accordingly, let copies of the affidavits filed by petitioner Nos.1 & 2
be sent to Mr. Onkar Mal Jain at 40- B, Vivekanand Road, Second
Floor, Kolkata-700007, who shall file a response by way of affidavits
on the contents of the affidavits filed by the Petitioners. The affidavits
be filed within four weeks after the receipt of affidavits from this
Court. The affidavits as directed shall be sent by Mr. Onkar Mal Jain
directly to the Registrar General of this Court.
5. Re-notify on 14th September, 2015.
6. This matter shall not be treated as part heard." (underlining in
original)
44. Pursuant to the above order Mr. Onkar Mal Jain, Arbitrator filed an
affidavit 17th July 2015. In the said affidavit it is categorical stated by him in
para 3 to 8 as under:
"3. That all the statements made in paragraphs 2, 4, 5, 6 & 7 of the
affidavit by Mr. Yogesh Jam (Petitioner No.l) and paragraphs 2, 4,
5, 6 & 7 of the affidavit by Mrs. Preeti Jain (Petitioner No.2) are
false and untrue and have been made to mislead the Hon'ble High
Court.
4. That following an agreement between the parties namely Mr.
Yogesh Jain and Mr. Rakesh Jain, I was appointed as Arbitrator by
both the parties along with all the then major members of their
families to settle and adjudicate on the differences/ disputes/partition
between them on 7th June 2002. Both the parties had submitted to me
that they being own brothers and I being their own Mama, the
proceedings be held in an informal manner and I had agreed and I
proceeded so. The parties namely Mr. Yogesh Jain and Mr. Rakesh
Jain represented their respective family which comprised of oneself,
one‟s wife and children and their joint family. It was represented by
the parties that the dispute relate to several properties, several
businesses and also the accounts and everything else which belong to
all of them including each member of their family and their mother
but excluding the personal effects i.e. ornaments/jewellery, clothes
etc. and, whatever is left after providing for their mother to her
satisfaction, was and is to be partitioned equally between the two
parties. After becoming major all the sons of both the parties have
confirmed that they are also bound by the arbitration being done by
me. Mr. Apoorve Jain son of the Petitioners declared and stated in
writing in my presence on 9th June 2003 (one year after appointment
as arbitrator) that he shall also be bound by the arbitration being done
by me. Furthermore, by Declarations before the Arbitrator dated 9th
June 2003 signed by all the then major members of both the parties'
families (including the petitioners and their son) all their liabilities
and businesses whether under sole-proprietory or partnerships or
companies were declared to be subject to partition. Now it is not open
to either party or their family members to claim that there is no
arbitration agreement between the parties or no arbitration
proceedings, as required to be carried as per law, have been
commenced or pending between the parties or that the arbitration is
limited to the ancestral family properties of their father.
5. That either on 7th June 2002 or any other day, I did not receive any
letter regarding family assets list or any Assets List in excel formats
(4 pages) or any supplementary list in letter form from either of the
petitioners namely Mr. Yogesh Jain and Mrs. Preeti Jain. Further, 7th
June 2002 or on any other day, I did not affix my signatures on any
letter or lists as alleged by Mr. Yogesh Jain (Petitioner No. l). All
such copies filed by Mr. Yogesh Jain before the Hon'ble Delhi High
Court stating them to be copies of the originals are fake and do not
contain my signatures. The documents seem to be forged documents
filed by the Petitioners (Mr. Yogesh Jain and Mrs. Preeti Jain) with a
view to mislead the Hon'ble High Court.
6. That the single page list which was given to me by Petitioner No. 1
Mr. Yogesh Jain is part of the arbitral record at Page No. 4 of Index
- I (Documents D2). Mr. Yogesh Jain (Petitioner No.l) made out two
lots in every part and put '(Y)' signifying his choice in his visibly
unique handwriting on computer printed list given by him. The
handwritten single page list given by the other party namely Mr.
Rakesh Jam (Respondent No. 1) is also part of the arbitral record at
page 5 of Index (Documents D3).
7. That Mr. Rakesh Jain (Respondent No. 1) had apprised me vide his
letter dated 11th December 2012 that the petitioners Mr. Yogesh Jain
& Mrs. Preeti Jam have filed some documents bearing my signatures
before till the Hon'ble High Court I responded vide letter dated 24th
December 2012 confirming that the documents in question are fake
and a matter of forgery. I also advised Mr. Rakesh Jain (Respondent
No. 1) that since the matter is already pending before the Hon'ble
High Court and the Arbitral Record in original is with the Hon'ble
High Court, he should bring the matter to the notice of Hon'ble High
Court for necessary action as the Hon'ble Court may deem fit and
necessary.
8. That I have no other knowledge in this case matter except the
affidavits of the Petitioners dated 06/05/2015 as forwarded to me now
and the letter dated 11/12/1012 of the Respondent No. l Mr. Rakesh
Jain enclosing copy of the said purported letter dated 7th June 2002
(with 4-page list in excel format as annexures 1-page supplementary
in letter form)." (underlining in original)
45. Thereafter this Court at the hearing on 19 th December 2016 passed the
following order:
"1. The Court directs that within a period of two weeks from today
Mr. Rakesh Jain will furnish to Mr. Yogesh Jain a complete list of all
the payments that have been made by him in respect of the loans of
the companies which form the subject matter of the interim Award
which is under challenge in these petitions.
2. Both parties, i.e., Mr. Yogesh Jain and Mr. Rakesh Jain will file
their respective affidavits, without prejudice to their rights and
contentions, as regards the maintainability of these petitions, giving
the details of the other proceedings involving them and the companies
in question in other fora subsequent to the impugned interim Award
including those pending as of date. These affidavits be filed at least
two weeks prior to the next date with advance copies being given to
the opposite party.
3. It is made clear that the above directions are without prejudice to
the respective rights and contentions of the parties.
4. The matter be treated as part-heard.
5. List on 14th February 2017."
46. Pursuant to the above order, Rakesh Jain filed an affidavit dated 17 th
January 2017 in which he pointed out as under:
(a) M/s RCC Cements Limited, a family owned company also part of
the declaration dated 9th June 2003 duly filed by Mr. Yogesh Jain and
had a total liability of Rs. 23,69,89,140/- towards Haryana Financial
Corporation (HFC) as on 1st April 2010 (date of the impugned
Award). Pursuant to the Award, the debt on M/s. RCC Cements Ltd
was duly settled by Rakesh Jain out of his own funds (as a one-time
settlement). He gave an affidavit in this regard on 25 th October 2010
to HFC. The non-dues certificate dated 25th April 2012 issued by HFC
and the document evidencing that the one-time settlement was done
by Rakesh Jain was enclosed as Annexure A-1 (collectively). These
communications were sent to the Petitioners. In fact Yogesh Jain had
given his affidavit dated 25th October 2010 to HFC. The Petitioners
had knowledge of the award dated 1st April 2010.
(b) The Non-Performing Asset (NPA) asset of REPL and AIPL held
by Central Bank of India was transferred to M/s. ASERC (India)
Limited. Both the companies had a total liability of Rs. 14,65,36,000.
The communication was sent by ASERC to both Rakesh Jain and
Yogesh Jain for clearing the dues. Rakesh Jain failed to appear or take
any interest in settlement with ASERC. On 14th January 2011 ASERC
agreed for OTS which was clearly undertaken by Rakesh Jain out of
his own funds. Yogesh Jain by his letter dated 30th August 2011 made
a representation to ASERC objecting to the OTS by Rakesh Jain.
ASERC by its letter dated 23rd September 2011 questioned Rakesh
Jain about his locus to clear the dues and by his letter dated 7 th
October 2011 clarified its stand and provided a copy of the order
dated 1st April 2010 to ASERC. There were several correspondences
between Yogesh Jain and ASERC which showed that Yogesh Jain
was aware that Rakesh Jain had cleared the family dues and made all
payments with reference to liabilities against AERC and other
documents are attached as Annexure A-2 (collectively).
47. These two documents showed that the Petitioners had knowledge of the
interim award dated 1st April 2010. Rakesh Jain had in his affidavit given
the details of other cases in the Debt Recovery Tribunal („DRT‟) which have
been settled and closed. Further, Rakesh Jain had paid to Savitri Jain a sum
of Rs. 50 lakhs in terms of the interim award dated 1 st April 2010. Her
affidavit dated 5th October 2011 acknowledged this sum and has been
enclosed with the affidavit of Rakesh Jain as Annexure A-3. This apart it is
pointed out that Rakesh Jain had filed OMP No. 805 of 2013 under Section
9 of the Act against the Petitioners. The said affidavit had also given details
including FIR against Yogesh Jain for forgery of signatures and transferring
funds. It is pointed out that Company Petition No. 87(ND)/12 filed by the
Petitioners was dismissed by the CLB on 12th June 2013. This was being
challenged by the Petitioners before the Court by filing Writ Petition (Civil)
No. 2385 of 2014.
48. Yogesh Jain has filed an affidavit listing out the disposal of certain other
proceedings before the DRT, DRAT and the pendency of the criminal
proceedings in various courts. The stand taken by Yogesh Jain is that the
payments made by Rakesh Jain were not out of his own pockets but had
been made by the respective contentions. It is alleged that as far as AIL is
concerned, Rakesh Jain was in collusion with Anil Chandra Jain and Ari
Deman Jain. He had withdrawn and misappropriated the funds for which the
shareholders of AIL including one of the directors have already approached
the CLB. As far as REPL was concerned, it had a huge funds surplus and
there was no question of it bring declared as NPA. It was to receive Rs. 2.89
crores from the Odisha State Government as the State Government had lost
the case in Supreme Court, however no efforts were made to recover such
amount. It was denied that Rakesh Jain had made any payment; that REPL
had made no payment to RCC Cement Limited; that RCC Cement Limited
had also made it clear that it had never been a party to the arbitration and
was not aware of any such arbitration proceedings and award.
49. As regards service of copy of the impugned interim Award on the
Petitioners, it is stated by Yogesh Jain that the building complex bearing
address 7/33, Darya Ganj, New Delhi is spread over an area of over 1800 sq.
yds. It consists of as many as six multi-storied buildings wherein more than
20 families comprising more than 120 people stay and "therefore, specific
addresses are required to be written on all correspondence." It was alleged
that Rakesh Jain and his son Akshat Jain are actively engaged in fudging the
correspondence being received at the common address. It is very much
possible that they or on their behalf anyone else would have received the
impugned interim Award addressed to the incomplete address of the
Petitioners. Thus the question of delivery of the Award upon Yogesh Jain
and his family did not arise. It is stated that despite address of Smt. Savitri
Jain being 4512-A, First Floor, 7/33, Ansari Road, Darya Ganj, New Delhi,
Rakesh Jain was receiving the correspondence addressed to her on her
behalf . It is maintained that Mr. Onkar Mal Jain was appointed only as a
mediator and not as an Arbitrator. There was no question of arbitration. In
any event the arbitration was not conducted under the provisions of the Act.
50. This Court has heard the submissions of Mr. Avadh Kaushik, learned
counsel for the Petitioners as well as Respondents who appeared in person.
51. The first issue to be decided is whether the petitions are barred by
limitation. As directed by the DB by its order dated 30th July 2014
depending upon the view taken on the above issue necessary orders would
be passed in these petitions.
52. The fact of the matter is that both petitions have been filed after more
than two years from the date of the impugned interim Award dated 1st April
2010. OMP No. 455 of 2012 was filed on 7th May 2012 and OMP No. 688
of 2012 was filed on 26th July 2012. In both petitions, the explanation
offered by the Petitioners is that they had received a copy of the impugned
interim Award dated 1st April 2010 only on 7th February 2012 along with a
copy of Execution Petition No. 308 of 2011 in the Court.
53. The legal position of the commencement of the limitation for filing the
petitions under Section 34 of the Act was explained by the Supreme Court in
Union of India v. Tecco Trichy Engineers & Contractors (2005) 5 SCC
239. It was explained by the Supreme Court that under sub-section (3) of
Section 34 of the Act, the limitation of three months commenced from the
date on which "the party making that application" had received the arbitral
Award. It was pointed out that:
"the delivery of arbitral award to the party, to be effective, has to be
„received‟ by the party. This delivery by the Arbitral Tribunal and
receipt by the party of the award sets in motion several periods of
limitation such as an application for correction and interpretation of
an award within 30 days under Section 33 (1), an application for
making an additional award under Section 33 (4) and an application
for setting aside an award under Section 34 (3) and so on. And this
delivery of the copy of award has the effect of conferring certain
rights on the party as also bringing to an end the right to exercise
those rights on expiry of the prescribed period of limitation which
would be calculated form that date, the delivery of the copy of award
by the Tribunal and the receipt thereof by each party constitutes an
important stage in the arbitral proceedings."
54. This was followed by the decision in State of Maharashtra v. ARK
Builders Pvt. Ltd. (2011) 4 SCC 616 wherein it was held that Section 31 (5)
of the Act contemplates not merely the delivery of any kind of copy of the
Award, but a copy of the Award which had been duly signed by the
Members of the Arbitral Tribunal. Following this, is the decision of the
Supreme Court in Benarsi Krishna Committee v. Karmyogi Shelters Pvt.
Ltd. (2012) 9 SCC 496 where it was clarified that "proper compliance with
Section 31(5) would mean delivery of a signed copy of the Arbitral Award
on the party himself and not on his Advocate, which gives the party
concerned the right to proceed under Section 34(3) of the aforesaid Act."
55. There is no doubt that for the period of limitation to commence it must
be shown that the Petitioners were delivered a certified copy of the
impugned interim Award dated 1st April 2010. Here the stand of the
Respondents is that signed copy of the impugned interim Award dated 1st
April 2010 was in fact despatched to the Petitioners by speed post at the
address to which all previous communications were sent, i.e, 7/33, Ansari
Road, Darya Ganj, New Delhi- 110 002. The case of the Petitioners is that
address of 7/33, Ansari Road, Darya Ganj is shared by 19 families. The
particular address of Yogesh Jain and Preeti Jain is 4525-A situated at 7/33,
Ansari Road, Darya Ganj, New Delhi. The case of Yogesh Jain is that "on
8th June 2002 when the house at 4525A, 7/33, Ansari Road, Darya Ganj,
New Delhi had come to the share of the Petitioner No. 1 and in which part
he has shifted with his family on 23 rd June 2002 as per MP No. 2 (page 5),
there was no reason for the Respondents or any of his family members to
give that address to receive any of their letters, documents or records or to
exchange that address in connection with their business proposal either with
banks or any other authorities."
56. However, Yogesh Jain does not dispute that the first interim order dated
14th October 2004 which was despatched to him by speed post at the same
address, i.e., 7/33, Ansari Road, Darya Ganj, New Delhi without indicating
the house No. 4525A, was in fact received by him on 18th October 2004.
This becomes clear from his affidavit filed by him on 1st December 2012
pursuant to the order passed by this Court on 20 th September 2012. In that
affidavit in para 12 he clearly admits to having received the first interim
order dated 14th October 2004. Yogesh Jain stated that "Had the Petitioner
been present on 14th October 2004 there was no reason for him to not to
have received the order when he had received a communication from the
Mediator on 18th October 2004 as the AD Card enclosed in the sealed
documents bears signature of the Petitioner. Petitioner reiterates that what
was received by him was the "interim order".
57. It is clear from the above passage while the Petitioner admits to having
received the interim order not the interim Award he does not deny that he
did receive such interim order dated 14th October 2004. This was at the
address shown as 7/33, Ansari Road, Darya Ganj, New Delhi. It is the
address on which the subsequent interim Award dated 1st April 2010 was
despatched. The AD card shows a signature which Yogesh Jain disputes.
58. There are several occasions on which the Petitioners themselves have
given their address as 7/33, Ansari Road, Darya Ganj, New Delhi. An
affidavit was filed by Yogesh Jain on 25th October 2010 where he had given
his address as 7/33, Ansari Road, Darya Ganj. The three affidavits of Preeti
Jain dated 5th September 2008, 23rd September 2009 and 15th December
2009 show her address as 7/33, Ansari Road, Darya Ganj, New Delhi. There
are numerous speed post delivery cards sent from the Arbitrator and the
Respondents which gave the address of Petitioners as 7/33, Ansari Road,
Darya Ganj, New Delhi.
59. There is merit in the contention of the Respondents that there must be
presumption drawn as to the proof of service. In this connection, the
decision of the Supreme Court in Green View Radio Service v. Laxmibai
Ramji (1990 ) 4 SCC 497 is relevant. The Court has no means to doubt the
affidavit of the Arbitrator, who is a maternal uncle of both Petitioner No. 1
and Respondent No. 1. Further, the affidavit of the mother, Smt. Savitri Jain,
confirming that she and the elders had spoken to both the parties and that
that only thereafter the interim Award came to be passed, cannot be
disbelieved.
60. Having carefully examined the numerous documents and affidavits filed
by the parties as well as the learned Arbitrator himself, the Court is not
prepared to accept the stand of Yogesh Jain and Preeti Jain that they were
unaware of the impugned interim Award dated 1st April 2010 till 7th
February 2012 when they were served with a copy of the execution petition.
61. Further, the documents placed on record unmistakably show that Yogesh
Jain received the interim order dated 14th October 2004 of the learned
Arbitrator. That it talks of the said arbitration agreement dated 7th June 2002
and other documents including document dated 9th June 2003 is not in doubt.
If Yogesh and Preeti Jain are to be believed that those documents were not
in their knowledge, then it is surprising that they raised no protest or posed
any question in relation thereto after receiving the said interim order dated
14th October 2004. The Court is left with the distinct impression that the
above stand is being put forth by the Petitioners questioning the veracity of
the arbitration agreement and the proceedings thereafter is an afterthought.
62. Yogesh Jain is in fact prevaricating. At one stage he accepted the interim
Award dated 14th October 2004 and did not choose to challenge it. For
reasons best known to him, he thereafter did not participate in the arbitration
proceedings. He also did not challenge the said interim Award dated 14th
October 2004. He allowed several steps to be taken in terms of both interim
Awards. That he chose to wait till Rakesh Jain had discharged many of the
liabilities of REPL and AIPL before coming forward to challenge the
impugned interim Award speaks volumes for his conduct. This conduct of
Yogesh Jain gives rise to considerable doubts about his bonafides.
63. The same holds good for Preeti Jain. Her plea about all their signatures
on the documents being forged appears to be a desperate attempt to escape
the consequences of the impugned interim Award dated 1st April 2010
which has since been acted upon. Her story is not believable. It is not
supported by any of the documents placed on record. The affidavit of Mr
Onkar Mal Jain also demonstrates the falsity of the pleas of Yogesh and
Preeti Jain. Mr Onkar Mal Jain is after all the maternal uncle of both Yogesh
and Rakesh Jain. There is no necessity for him to speak anything but the
truth. It is not possible to brush aside his affidavit. The learned Arbitrator
has on affidavit denied having received any letter from Yogesh Jain or Preeti
Jain regarding family assets as such or any supplementary list or signatures
on them.
64. In the circumstances, the Court negatives the plea that there was no
arbitration agreement involving Yogesh Jain and Preeti Jain or that Mr
Onkar Mal Jain was not appointed by them as Arbitrator.
65. As far as the petition OMP 688 of 2012 by Apoorve Jain is concerned,
no formal notice was issued thereon by the Court and it was being heard
along with OMP 455 of 2012. Apoorve Jain is not a party to the impugned
interim Award dated 1st April 2010. It is not shown how the said petition at
his instance is at all maintainable. This is apart from the fact that the petition
is even otherwise hopelessly time barred. The Court also rejects the attempt
by Apoorve Jain to wriggle out of the declaration made by him before the
learned Arbitrator. His stand about his not being aware why his signatures
were being obtained, or that they were taken for some other purpose, is
again not convincing.
66. Consequently, the inevitable conclusion is that both these petitions filed
more than two years after the impugned interim Award dated 1st April 2010
are barred by limitation in terms of Section 34 (3) of the Act read with the
proviso thereto. Additionally OMP 688 of 2012 is also held not maintainable
at the instance of a person who is not a party to the impugned interim Award
dated 1st April 2010.
67. Both these petitions are accordingly dismissed with costs of Rs.20,000
each which will be paid by the Petitioners to the Respondents within a
period of four weeks from today.
S. MURALIDHAR, J.
APRIL 18, 2017
Rm
