Sandeep Aggarwal` vs Raj Kumar Aggarwal & Ors
2019 Latest Caselaw 2058 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Date of decision: 16th April, 2019.

+                                 CS(OS) 36/2019

       SANDEEP AGGARWAL                                    ..... Plaintiff
                   Through:            Mr. D.S. Chauhan and Ms. Ruchi
                                       Singh, Advs.

                                    Versus

    RAJ KUMAR AGGARWAL & ORS                  ..... Defendants
                  Through: Mr. Aman Shankar, Adv. for D-2.
                           Mr. Santosh Kumar Sahu, Adv. for
                           D-3&4.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

IA No.5545/2019 (of defendants no.1&5 u/S 151 CPC) and IA
No.5546/2019 (of the defendant no.2 u/S 151 CPC)

1.

The defendants no.1&5 as well as the defendant no.2 have filed these identical applications under Section 151 of the Code of Civil Procedure, 1908 (CPC) seeking dismissal of this suit for partition inter on the ground that the Partition Deed filed by the plaintiff himself along with the plaint contains an arbitration clause.

2. I have enquired from Mr. Aman Shankar, Advocate appearing on behalf of the applicant/defendant no.2, whether he has heard of Section 8 of the Arbitration & Conciliation Act, 1996.

3. He states that he has not, though he is eleven years into the profession.

4. Be that as it may, upon being asked to argue the application, he states that he does not even have his file.

5. None appears for defendants no.1&5 whose application also is listed.

6. The Court cannot be helpless in such situations. Matters are listed in the Court for effective hearing and not for the counsels to appear, as Mr. Aman Shankar, Advocate is appearing, and thereby allow the listing which is at a cost, assessed nearly five years ago at over Rs.6,500/- each listing, to be wasted. Even otherwise, the Court faces the brunt of arrears and long pendency, with the litigants/counsels causing the same going scot-free. No ground for adjournment is thus made out and more so when the applications are found to be totally misconceived.

7. The plaintiff has instituted this suit against defendants No.1 to 5, namely (i) Raj Kumar Aggarwal; (ii) Shyam Kishore Aggarwal; (iii) Harsh Aggarwal; (iv) Kriti Aggarwal; and, (v) Mukesh Aggarwal @ Mukesh Gupta, for partition of property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi - 110 006 admeasuring 192.35 sq. yds., pleading (a) that initially property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi was double the size of the suit property and was jointly owned and possessed by the ancestors of the two brothers i.e. Puran Chand Aggarwal and Prem Narain, who along with their respective family members partitioned the property by mutual consent vide a registered Partition Deed dated 28th March, 1979 executed and signed by them; (b) that by virtue of the said

Partition Deed, the larger property jointly held by Puran Chand Aggarwal and Prem Narain and their respective family members was partitioned in equal proportion resulting in property measuring 192.35 sq. yds each falling to the share of the families of Puran Chand Aggarwal and Prem Narian; (c) that Puran Chand Aggarwal died intestate on 23rd January, 1990, leaving his widow Jai Rani and five sons i.e. the plaintiff, defendant no.1, defendant No.2, Rakesh Aggarwal being the predecessor-in-interest of defendants No.3&4 and defendant No.5, each of which sons inherited 1/6th undivided share in the property with Jai Rani having the remaining 1/6th share; (d) that Jai Rani the widow of Puran Chand Aggarwal i.e. the mother of the plaintiff and defendants No.1,2&5 and the grandmother of the defendants No.3&4 was the owner of Flat No.49, on Third Floor, Rajdhani Nikunj, Plot No.94, I.P. Extension, Patpargarj, Delhi and it was decided amongst the family members that the said flat may be transferred in the name of defendant No.2 Shyam Kishore Aggarwal subject to his giving up right, title and interest in the suit property and the defendant No.2 Shyam Kishore Aggarwal agreed thereto and the flat was transferred in the records of Delhi Development Authority from the name of Jai Rani to the name of defendant No.2 Shyam Kishore Aggarwal and the Relinquishment Deed executed by defendant No.2 Shyam Kishore Aggarwal of his share in the suit property was kept in the safe custody of defendant No.1; (e) that Jai Rani died intestate on 24th January, 2004, leaving behind the parties to the suit as her heirs; however, the defendant No.2 having already given up his share in the suit property did not have any share in the suit property; (f) that thus, the plaintiff, defendant No.1 and the defendant No.5 have 1/4th share each in property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi admeasuring 192.35 sq. yds.

aforesaid and the defendants No.3&4 together have the remaining 1/4th share in the property; (g) however, since the plaintiff does not have a copy of the Relinquishment Deed executed by the defendant No.2 of his share in the suit property and if the defendants No.1&2 collude with each other and do not produce the Relinquishment Deed, then the plaintiff would also have a share in Flat No.49, on Third Floor, Rajdhani Nikunj, Plot No.94, I.P. Extension, Patpargarj, Delhi; (h) accordingly, this suit for partition only of property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi admeasuring 192.35 sq. yds.

8. The plaintiff, along with the plaint has inter alia filed a certified copy of the Partition Deed dated 28th March, 1979 and Clause 7 whereof is as under:-

"7. In case of any dispute, the matter will be referred for sole arbitration of Shri Atul Kumar Gupta and in his absence to Shri Sushil Kumar Gupta and the decision of their arbitration shall be absolutely binding on both the parties. The value of the whole property has been assessed at Rs. Fifty two thousand only for the purpose of stamp duty."

9. It is on account of the aforesaid clause in the Partition Deed aforesaid that dismissal of the suit is sought.

10. The applicants/defendants No.1&5 and the applicant/defendant No.2 in their respective applications have pleaded that Mr. Atul Kumar Gupta, to whom the parties to the Partition Deed aforesaid had agreed to refer their disputes to arbitration has died and contend that thus Mr. Sushil Kumar Gupta must be appointed as the Arbitrator to adjudicate the disputes as raised in this suit.

11. A perusal of the Partition Deed aforesaid shows:

(A) the same to have been executed by (i) Puran Chand Aggarwal;

(ii) Jai Rani; (iii) defendant No.1; (iv) defendant No.2; (v) Rakesh Aggarwal, being the predecessor-in-interest of defendants No.3&4;

(vi) defendant No.5; and, (vii) plaintiff, together described as parties of one part AND (1) Prem Narain; (2) Satya Narain; (3) Surya Narain; (4) Chander Narain; (5) Anil Kumar, all sons of Prem Narain; and, (6) Vimla Devi, wife of Prem Narain, together described as the parties of the second part;

(B) the same to be with respect to property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi;

(C) the parties of the first part and the parties of the second part thereto having agreed to partition property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi aforesaid into half and half, with each of the two sets of the parties becoming exclusive owners of 192.35 sq. yds. of the property; and,

(D) the parties of the first part and the parties of the second part having so partitioned the property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi amongst themselves with each becoming absolute owner of their half of property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi, as described in the Partition Deed.

Though a reading of the Partition Deed also shows the plaintiff‟s narration in the plaint as to the title to the property being not accurate, in as

much as Prem Chand Aggarwal and his wife Jai Rani are not found to be having any share in the property but the same is not relevant for the present purpose.

12. Section 8 of the Arbitration and Conciliation Act, 1996 (as amended with effect from 23rd October, 2015) is as under:

"8. Power to refer parties to arbitration where there is an arbitration agreement.--(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

[Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.] (3) Notwithstanding that an application has been made under subsection (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made."

13. The relief which the applicants/defendants No.1&5 and applicant/defendant No.2 are seeking by these applications falls under

Section 8 of the Arbitration Act and even if were to be allowed, does not entail dismissal of suit but disposal of suit by referring the parties to arbitration.

14. For Section 8 of the Arbitration Act to apply, the existence of an agreement between the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, is necessary. The question thus to be considered is, whether the parties to this suit entered into any agreement to submit to arbitration the disputes, as raised by this suit.

15. I am, in the arbitration clause aforesaid in the Partition Deed dated 28th March, 1979 unable to find existence of any agreement between the parties to this suit of reference of disputes as have arisen in this suit to arbitration of Mr. Atul Kumar Gupta or Mr. Sushil Kumar Gupta. My reasons therefor are stated below:

A. Clause 7 of the Partition Deed reproduced above is an agreement between the parties of the first part therein i.e. Puran Chand Aggarwal and his family members, on the one hand and parties of the second part therein i.e. Prem Narain and his family members on the other hand, of reference of disputes between them relating to partition of property ad measuring 384.70 sq. yds. into two halves of 192.35 sq. yds. each to sole arbitration of Mr. Atul Kumar Gupta and in his absence to sole arbitration of Mr. Sushil Kumar Gupta.

B. Such disputes could be as to the physical demarcation of two portions of property or as to use of common main entrance to the property or any other matters as provided for in the Partition Deed.

C. It is not the case of the plaintiff that there are any disputes between the parties to this suit on the one hand, described in Partition Deed as parties of the first part, with the members of the family of Prem Narain on the other hand, described in the Partition Deed as parties of the second part. In fact, Prem Narain and/or his family members are not even parties to this suit.

D. Clause 7 supra of the Partition Deed does not contain any agreement inter se the family members of Puran Chand Aggarwal i.e. the plaintiff and the defendants, of arbitration of disputes, inter se themselves with respect to half share admeasuring 192.35 sq. yds. of property No.940-944, Kucha Pati Ram, Bazar Sita Ram, Delhi which had fallen to their exclusive share.

E. The disputes, likely to be subject matter of the present suit, though there are no written statements till now, on the contrary are likely to be as to the shares of each of the parties, the existence of family settlement whereunder defendant no.2 Shyam Kishore Aggarwal relinquished his share in the property in lieu of Patparganj flat, the collusion if any between defendants no.1&2 and effect if any thereof etc.

F. There is no agreement of arbitration of such disputes.

G. The disputes subject matter of this suit do not emanate from the Partition Deed aforesaid and there was no partition of half ad measuring 192.35 sq. yds. of property inter se parties to this suit.

H. In fact the parties to this suit, though signatories to Partition Deed containing arbitration clause, are parties as members of one group, qua another group and not in their individual capacity.

I. If two or more persons together enter into an agreement with another person or with two or more other persons and agree to settlement of disputes between the two groups by arbitration, the disputes arising inter se the members of one group, in my view, do not become arbitrable in the absence of any separate agreement amongst themselves of settlement of disputes inter se amongst themselves also by arbitration.

J. Not only were the parties to this suit not parties to any agreement of arbitration of their inter se disputes but the subject matter of the present suit is also not subject matter of the arbitration clause contained in the Partition Deed aforesaid. The agreement agreed to in the Partition Deed aforesaid was of disputes between the two groups and not of disputes inter se each group.

16. The counsel for the applicant/defendant No.2, though had not made any argument when called upon to do so, during the dictation was interrupting and states that "each of the parties to this suit is a signatory of the Partition Deed".

17. Undoubtedly so. However merely because the parties to a lis together are parties to an agreement with another party or another party constituting two or more persons and such agreement provides for arbitration would not amount to an agreement of arbitration of disputes inter se members of a party, who had together entered into an agreement with another party or another party having two or more person.

18. The applications are thus totally misconceived and each of the applications is dismissed with costs of Rs.10,000/- payable to the counsel for the plaintiff within four weeks hereof.

RAJIV SAHAI ENDLAW, J.

APRIL 16, 2019 „pp/bs‟..