AI Drafter 
TaxTMI 
TaxTMI 
1994 (4) TMI 265
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....vents leading to appointment of the arbitrator. Gurcharan Singh, his wife, Smt. Jaswant Kaur, his daughters, Miss Soniya and Miss Ramanjit Kaur, as also his son, Gurpreet Singh, filed Company Petition No. 79 of 1987 under section 155 of the Companies Act, 1956, for rectification of the register of members. This petition was fixed against Raghbir Cycles Private Limited, Raghbir Singh and his sons, Manjit Singh, Kanwaljit Singh, Paranjit Singh and Harjit Singh. This petition was filed way back in July, 1987, and at that time Paranjit Singh and Harjit Singh were admittedly minors and were sued through their father, Raghbir Singh, as their natural guardian. It is, inter alia, pleaded that the petitioners hold the following shareholding in accordance with the books of the company : 1.Gurcharan Singh 600 shares (although he is entitled to 2,100 shares in accordance with the allotment of 1,500 shares which was made on July 22, 1985, as evidenced by the return of shares made by the company to the Registrar of Companies). 2.Smt. Jaswant Kaur, wife of S. Gurcharan Singh 2,375 shares. 3.Miss. Soniya 2,640 shares. 4.Gurpreet Singh minor 3,250 shares. 5.Miss. Raman....
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....inance Company, Sikri Finance Company and Sachdeva Company, were washed off by allotting the shares to Shri Narinder Singh Sethi, proprietor of Sethi Finance Company, Shri Devinder Singh, proprietor of Sikri Finance Company and Shri Sampuran Singh, proprietor of Sachdeva Finance Company. It is pleaded that these shares were never applied for by these allottees and the same were subsequently got transferred by Raghbir Singh, respondent No. 2, in the names of Kanwaljit Singh, Paranjit Singh and Harjit Singh, respectively. The total number of shares allotted were 37.336 with the following break up : Sardar Narinder Singh 12,256 shares. Sardar Sampuran Singh 11,980 shares. Sardar Devinder Singh 13,100 shares. 37,336 shares. The allotment was made on July 4, 1985. It is alleged that Gurcharan Singh who was the director of the company never attended such a meeting authorising such allotment. The transfers were also pleaded to be in violation of the articles of association of the company which have been reproduced at pages 7, 8 and 9 as under : "11. Subject to the restriction of these articles shares, shall be transferable but every transfer must be....
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....e event of the whole of the said shares not being sold under the foregoing sub-clauses hereof, the vendor may at any time within six calendar months after the expiry of the said 14 days, transfer the shares not so sold to any person (subject to the provisions of clause 15 hereof). (e) The provisions hereinbefore contained shall not apply to a transfer merely for the purposes of effecting the appointment in the name of new trustees, nor to a transfer by executors or administrators of a legatee under the will of, or, to the husband, wife or next of kin of a deceased member, nor a transfer by a trustee to a beneficiary provided that is proved to the satisfaction of the board that the transfer bona fide, falls within one of these exceptions." It is further pleaded that no notice whatsoever was given to the petitioners in compliance with article 12(a) reproduced above nor were they asked if they were willing to get these shares which were sought to be transferred by the allottees who themselves were fictitious. Narinder Singh and Sampuran Singh are brothers-in-law of respondent No. 2, the sisters of petitioner No. 1 as also respondent No. 2 being married to them. Devinder Singh is....
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....lotted to the following persons: "1,500 shares by Raghbir Singh to self. 1,500 shares to Manjit Singh, his son. 1,700 shares to Kanwaljit Singh, his son. 2,700 shares to Paranjit Singh, his minor son. 1,700 shares to Harjit Singh, his another minor son." The aforesaid allotment, it is pleaded, was made in the meeting which was never attended by petitioner No. 1 nor was any notice issued to him. It is further pleaded that the above devices were adopted by respondent No. 2 and his sons, respondents Nos. 3 to 6, with a view to obtain a majority holding in the equity capital of the company and defeating for all times to come, the right of petitioner No. 2 who was a shareholder of the company to the extent of 50 per cent, at the time of its inception. The above devices were adopted by respondent No. 2 in league and in consultation with Shri D. C. Gupta, who was the auditor of the company. He never looked into the fictitious entries which had been made. On the other hand, he himself got 10 shares allotted to the Punjab Management Consultants Private Limited of which he is the managing director. On the aforesaid facts, it was sought to be made out that 1,500 shares which....
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....; Sh. Paranjit Singh 100 2,950 1,350 B/f 2,950 B/f 1,350 June, S. Raghbir Singh 500 1977 3,450 1,350 June, 1978 B/f 3,450 B/f 1,350 June, 1979 B/f 3,450 B/f 1,350 June, 1980 B/f 3,450 B/f 1,350 June, 1981 B/f 3,450 B/f 1,350 Smt. Hardip Kaur 400 S. Gurpreet Singh 600 S. Manjit Singh 450 Miss. Sonia 350 S. Kamaljit Singh 500 Miss. Ramanjit 300 S. Harjit Singh 500 S. Paranjit Singh 500 5,850 2,600 June, 1982 B/f 5,850 B/f 2,600 June, 1983 B/f 5,850 B/f 2,600 Smt. Hardip Kaur 800 Smt. Jaswant Kaur 1,200 S. Manjit Singh 550 S. Gurpreet Singh 500 S. Kamaljit Singh 450 Miss. Sonia 850 S. Harjit Singh 500 Miss. Ramanjit Kaur 950 S. Paranjit Singh 850 9,000 6,050 June, 1984 B/f 9,000 B/f 6,050 S. Raghbir Singh 900 S. Gurcharan Singh 550 ....
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....ich the petitioner was present himself and the transmission was approved by the board of directors of the company. It was further pleaded that the company was doing excellent business and wanted to expand business and go for the export of the product of the company in a big way and as such the company needed finances. The company obtained finances from the firms, Sethi Finance Company, Sikri Finance Company and Sachdeva Finance Company. All the said firms are the sole proprietorships and are in the control of the brothers-in-law and nephew of petitioner No. 1 and respondent No. 2. Petitioner No. 1 was himself director of the company in the year 1981 and was fully aware of the investments which were made by the brothers-in-law and nephew of petitioner No. 1 and respondent No. 2. It had been agreed that the loan/deposit given by the said firms shall be given 18 per cent, interest. The said firms rightly advanced money and gave deposits as they were aware of the fact that the company was doing good business and was contemplating to extend and expand the export business as well. Petitioner No. 1 and respondent No. 2 had agreed to accept the deposit/loan from their relations as the amou....
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.... groups of the share holders of the company, one headed by Raghbir Singh, respondent No. 2 and the other by petitioner No. 1. The shareholding of the group of petitioner No. 1 in the year 1983 was as under : Shareholding of the group Shareholding of group of of petitioner No. 1 Raghbir Singh, respondent No. 1 1983 6,050 shares 9,000 shares. (Additional 1,500 shares of Smt. Chanan Devi, mother of petitioner No. 1 and respondent No. 2 who was alive at that time. In addition, 20 shares were being held by persons other than the two groups mentioned above). 1984 8,250 shares 16,250 shares. (Additional 1,500 shares of Smt. Chanan Devi, mother of petitioner No. 1 and respondent No. 2, who was alive at that time. In addition, 40 shares were being held by persons other than the two groups mentioned above). 1985 11,650 shares 16,250 shares. (June 30, 1985) (Additional 1,500 shares of Smt. Chanan Devi, mother of petitioner No. 1 and respondent No. 2, who was alive at that time. In addition, 40 shares were being held by persons other than the two groups mentioned above). 1985 13,150 shares 16,250 shares. (December 31, 1985) ....
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....uly 4, 1985 was placed on the records of the case. These shares, it is pleaded, were subsequently got transferred, i.e., 12,251 shares, in the name of Narinder Singh were transferred in the name of Kanwaljit Singh son of Raghbir Singh. 13,000 shares in the name of Devinder Singh were transferred in the name of Paranjit Singh, son of Raghbir Singh, and 11,980 shares in the name of Sampuran Singh were transferred in the name of Harjit Singh. On August 1, 1984, 20,115 shares were alleged to have been allotted to 40 persons. The names of these 40 persons have been separately given in annexure-D. Out of these 40 persons, there were only two employees who were working in the company whereas 38 persons were non-existing. Out of these, 20,115 shares so allotted to the shareholders were subsequently got transferred by respondent No. 2 in his own name. 10,680 shares were transferred in the name of Raghbir Singh and balance of 10,055 shares were got transferred in the name of Manjit Singh, son of Raghbir Singh. No transfer deed was ever executed by the shareholders nor did the shareholders to whom the allotments of shares were made ever pay the amount said to have been paid at the time of all....
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....ng general meetings after December 31, 1985. There is also a complaint that the balance-sheet of the company has not been passed in accordance with section 210 of the Companies Act, 1956. Further, with a view to defeat the purposeful profitability of the company, respondent No. 2, Raghbir Singh, started another concern by the name and style of Raghbir Bicycles International in the premises of the company and that concern is run under the sole proprietorship of Mrs. Hardeep Kaur, wife of respondent No. 2. This concern, it is pleaded, is manufacturing cycle parts and utilising the machines and other assets of the respondent-company and is diverting the profits of the company to this concern. By this device, what the company would have gained or earned is being diverted to the coffers of Smt. Hardeep Kaur. It is further pleaded that the company receives different quotas of steel, coal, nickel, etc. These quotas are of the total value of about Rs. 10 lakhs per mensem. The quotas were supplied either monthly or by intervals of two or three months but the total value of the receipts during the year is about Rs. 1 crore. These quotas have been allotted to the respondent-company for the ma....
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....h and his two sons for their private ends by taking either fixed deposit receipts or keeping the money in pillows and quilts which were seized by the Income-tax Department officials. It is further pleaded that all the books of account which have been seized by the department prove conclusively the allegations which have been made by the petitioners with respect to the fraudulent credit entries of the three finance companies, the payment of commission and the with drawals of money by Raghbir Singh and his two sons from the bank accounts in the Punjab and Sind Bank, Miller Ganj, Ludhiana, Oriental Bank of Commerce and Punjab and Sind Bank, Guru Nanak Engineering College Branch, Ludhiana. From the facts stated above, it is ultimately prayed that an order for winding up of the company be passed and the official liquidator be appointed to take charge of the company. This petition, too, has been seriously opposed by the respondents as in the written statement filed by the respondents, by way of preliminary objections, it has been pleaded that the petition under section 433 read with section 439 of the Companies Act, 1956, is not maintainable as the petitioners have already agitated....
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....as filed on behalf of the petitioners. The other application was filed on behalf of the respondents under Order 23, rule 3 read with section 151 of the Code of Civil Procedure and rule 9 of the Companies (Court) Rules, 1959, for appointment of an umpire to reconcile the dispute between the parties. This court, on October 28, 1992, passed the following order on the aforesaid applications : "After going through the contents of the applications and hearing learned counsel for the parties, I order that the entire dispute between the parties would be decided by Shri D. S. Tewatia, senior advocate, practising in the Supreme Court. Mr. D. S. Tewatia will act as an arbitrator as also umpire. He would hear the parties or counsel and not the attorneys of the parties and would record whatever proceedings he might deem necessary and decide the dispute with regard to the companies known as Raghbir Cycles (P) Ltd. and Overseas Cycles Company. It will be open to the parties to place necessary evidence before the arbitrator/umpire to show that the other properties even though individually owned were acquired through the funds of the company and if that is shown to the satisfaction of the umpire....
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....filing their respective claims. On the adjourned date, i.e., November 21, 1992, whereas the petitioners' counsel, Shri L. M. Suri, was present for Gurcharan Singh, petitioner, Shri J. S. Narang appeared with his client, Shri Raghbir Singh. The following order was passed on the said date : "Mr. Suri has placed on the record claim petition as directed on the last date of hearing, Mr. P. S. Chhina undertakes to file the requisite claim petition of his side on December 5, 1992, after having given a copy thereof to Mr. Suri in advance. Mr. Suri would hand over the copy of the claim petition to Mr. Chhina while receiving the copy of the claim petition from Mr. Chhina. Copies of the two applications filed along with the claim petition one for injunction restraining transfer of the property Miscella neous Petition No. 1 and the other for inspection of record Miscellaneous Petition No. 2 have, however, been given to Mr. Chhina today. Both the sides undertake to file a reply to the respective claim petition, including the application aforesaid, on December 19, 1992. Both sides agree to appear on the said date, i.e., December 19, 1992, before me at A-27/15 DLF Qutab Enclave Phase-I, Gurgao....
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....tatements to the following effect : "The arbitrator/umpire is requested to give his award on the basis of the material already submitted before him by either party as we do not wish to adduce any evidence documentary or oral." After recording the aforesaid statement, the arbitrator passed the order that the award shall be announced in due course. On January 27, 1993, the proceedings reveal that the award was signed and the same along with two signed copies thereof and the minutes of the proceedings were sent to the High Court by courier so that the same was submitted before this court on January 29, 1993, the date which had been fixed for awaiting the award. In the award, the arbitrator, after noticing the two petitions, bearing No. 79 of 1987 under section 155 of the Companies Act, 1956, and No. 134 of 1987 under section 433 read with section 439 of the Companies Act, 1956, as also the application under rule 9 of the Companies (Court) Rules and the application under Order 23, rule 3 read with section 151 of the Civil Procedure Code, referred to above, as also the order passed by this court appointing the arbitrator as also the proceedings that have taken place before him ....
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....her death. (ii)That 37,336 shares allegedly acquired by the three sons of Shri Raghbir Singh, viz., Kanwaljit Singh-12,256, Paranjit Singh-13,100 and Harjit Singh-11,980 and 20,115 shares acquired by Shri Raghbir Singh, respondent-10,060 and son, Manjit Singh-10,055 as referred to in para 9 of Company Petition No. 79 of 1987, and detailed in paras 9, 13 and 14 of the claim petition of Shri Gurcharan Singh submitted before me, are not to be owned by them alone. Out of 57,451 shares, Shri Raghbir Singh and his sons would retain only 34,471 shares, i.e., 60 per cent, and the remaining 22,980 shares are deemed to have been owned by Shri Gurcharan Singh and his family all along from the same relevant date and these shares shall be treated as paid up shares. The resultant position would be that in regard to 37,336 share mentioned above- (a)Kanwaljit Singh's holding shall stand reduced to 7,354 shares; (b)Pranjit Singh's holding shall stand reduced to 7,860 shares; (c)Harjit Singh's holding shall stand reduced to 7,188 shares; And in regard to 20,115 shares referred to above- (a)the shareholding position of Shri Raghbir Singh shall stand reduced to 6036 shares ; (b)an....
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.... in his capacity as the director of the said company. (vii)That the house at 319, Model Town, Ludhiana, is and shall be the absolute and exclusive property of Shri Gurcharan Singh, petitioner. (viii)S.C.O. at 3 Bentick Street, Calcutta, is the rented premises of Overseas Cycles Company and Raghbir Cycles Private Limited has no right of any kind in and over the said premises. (ix)Flat No. 1 (First floor) 10, Lord Sinha Road, Calcutta, is the absolute and exclusive property of Shri Gurcharan Singh as an individual. (x)That Raghbir Cycles Private Limited shall have no concern with the land and building at Partap Nagar, Ludhiana, which at one point of time, was owned by Smt. Chanan Devi. The said property is and shall be treated in the ownership of Paranjit Singh. (xi)Kothi at 2, 3, 4 and 5, Sant Fateh Singh Nagar, Ludhiana, is and shall be the absolute and exclusively owned property of Shri Raghbir Singh and his sons. (xii)Shri Gurcharan Singh, petitioner, and his family or Raghbir Cycles Private Limited, shall have no right of any kind whatsoever in the following : (a)Farm at village Budhewal, Ludhiana or (b)Sikri Steels (P) Limited built in property unit at N....
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....conducted the arbitration proceedings inasmuch as he examined the parties separately behind each other's back like a conciliator and not as an arbitrator. This procedure is not warranted in arbitration proceedings. Most of the time was spent on the separate meetings and the joint meeting was held only for 10 to 15 minutes. Having found that there were vast differences between the two brothers and reconciliation was not possible, the learned arbitrator ought to have allowed them opportunity to assist him in resolving the disputes with the help of their counsel who" could refer to the documents on the record and argue the case of their respective clients effectively. It is further pleaded by way of another objection that besides the two brothers, the sons of Raghbir Singh were also parties to the petition under section 155 of the Companies Act, 1956, but they were not called for hearing at any time although it was mentioned in the order appointing the arbitrator that the parties or their counsel shall be heard and not the attorney of the parties. In the manner aforesaid, it is pleaded that the sons of Raghbir Singh have been deprived of the larger part of their shareholding without h....
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....urcharan Singh to render accounts to the company of the Arora Palace Cinema whose management has been entrusted to him. If he does not render the accounts of the cinema to the company, no balance-sheet can be prepared as the accounts of the company will be incomplete. It is further the case of the respondent that both the cinema houses are owned by the company and are located in the same premises. There is only one way to the cinema halls. There is only one booking window for both the cinema houses and separate management of each cinema house is not possible. It will create operational difficulties in the running of the cinema shows. There will always be conflict between the employees of the company and those of Gurcharan Singh. It is, thus, pleaded that the directions given in the award were unworkable and void being against the provisions of the Companies Act. The next objection of the respondent is that the arbitrator has awarded Overseas Cycle Company to Gurcharan Singh as a sole proprietory concern against the documents on record which include judgments by the courts as also that the arbitrator has not read and applied his mind to the entire evidence on the record. The part....
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....port of this claim. The matter with regard to the will as decided by the arbitrator has also been objected to. The last objection is that in clauses VII, VIII and IX, the arbitrator has created rights in immovable property in favour of Gurcharan Singh and Overseas Cycles Company. The award containing these clauses requires compulsory registration under section 17(1)(e) of the Registration Act. The award having not been registered cannot be made rule of the court nor can a decree be passed on the basis thereof. In the reply filed on behalf of the petitioners by way of preliminary objections, it is pleaded that the objection petition is not competent in law as it had been agreed between the parties that the decision of the arbitrator/umpire shall be final and binding upon the parties and shall not be questioned in any court of law. On the merits also the objections as made out above have been stated to be incorrect. It is pleaded that the umpire had meetings with both the parties to their satisfaction and both of them had given in writing that they did not want to lead any other additional evidence or present any other documents. It was agreed by the parties and counsel for ....
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....age of shares of Raghbir Singh. It is denied that the award is beyond the order of reference. The arrangement for future management is part and parcel of the reference because Gurcharan Singh had filed a winding up petition and it is within the ambit and scope as also the authority of the umpire and the court to provide for future management of the company. The arbitrator has rightly directed that there shall be only two directors. The plea of the objector that it would not be possible to run the cinemas together has been refuted. It is also pleaded that there will be no difficulty in running of the company. It has been made clear by the umpire that the company would be run by the directors being both the brothers or their nominees. Therefore, no part of the award is null and void. It is further pleaded that there is no question of preparation of two annual sheets. In fact it is well known that in large companies, various directors look after the work of the company. With regard to workability of the cinema hall, it is denied that there is only one way to the cinema hall or only one set of booking windows and there is no provision of separate management of the two cinemas. It is pl....
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....all be useful at this stage to examine the basic limitations in challenging the award. It is settled law that the court does not sit in appeal or reassess the evidence and even if there is misconduct by the arbitrator but the same pertains to infirmity in the procedure, it is no ground to set aside the award. The apex court in Jagdish Chander Bhatia v. Lachhman Das Bhatia [1993] 1 JT 232 (SC), while relying upon its judgment in Food Corporation of India v. Joginderpal Mohinderpal [1989] 2 JT 89 (SC), held that (at page 236) : "an award of an arbitrator can only be interfered with or set aside or modified within the four corners of the procedure provided by the statute. The court must find out whether the arbitrator has misconducted himself or there was any infirmity in the procedure, such as, the arbitrator having travelled beyond the terms of the reference or there being an error apparent on the face of the award. It is not misconduct on the part of an arbitrator to come to an erroneous conclusion on a disputed issue. In the case of an error apparent on the face of the award, the award can be set aside only if there is any proposition of law on which the award is based which is in....
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....cannot be permitted to take an objection if no such objection was taken before the arbitrator. Acquiescence by conduct itself debars a particular party from raising the objection which was not canvassed before the arbitrator. This was so held by the Bombay High Court in Rashtriya Chemicals and Fertilizers Ltd. v. Mohindersingh and Co., AIR 1985 Bom 381, while relying upon N. Chellapan v. Kerala State Electricity Board, AIR 1975 SC 230, K. N. Co-operative Society v. Union of India, AIR 1973 SC 1338 and NES and T Corporation v. State of Punjab, AIR 1963 Punj 56. The other well known principle is that the court can not review the award of an arbitrator and correct any mistake in adjudication unless an objection to the legality of the award is on the face of it. The award on both fact and law is final and there is no appeal from the verdict of the arbitrator. In Champsey Bhara and Co. v. Jivraj Balloo Spinning and Weaving Co. Ltd. [1922] 50 LR LA. 324 (PC), the Privy Council stated that "An error in law on the face of the award, means, in their Lordships' view, that you can find in the award or a document actually incorporated thereto, as for instance a note appended by the arbitrator ....
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....y the arbitrator were not under the provisions of the Arbitration Act. The company petitions, referred to above, were filed way back in the year 1987 and the same had matured for arguments and it was when the arguments almost in entirety were heard that the parties to the litigation filed two applications, one under rule 9 of the Companies (Court) Rules, 1959, for appointment of an umpire to decide the disputes between the parties and the other under Order 23, rule 3, read with section 151 of the Code of Civil Procedure and rule 9 of the Companies (Court) Rules, 1959, for appointment of an umpire to reconcile the disputes between the parties. The application under Order 23, rule 3 read with section 151 of the Code of Civil Procedure and rule 9 of the Companies (Court) Rules was filed by the objectors. It is on account of the two applications, referred to above, that an arbitrator was appointed. Reference to arbitration under the provisions of the Arbitration Act is decipherable from sections 8,20 and 21. Section 8 deals with the situation where there is an arbitration agreement which provides that the reference shall be made to one or more arbitrators to be appointed by the cons....
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....ence." The first contention of learned counsel for the objectors is, thus, repelled. The alternative contention raised by Mr. Ramaswami and as noticed above, has to be accepted not only as per the concession of counsel opposite but also for the reason that merely mentioning in the order that the award cannot be challenged, a party cannot be debarred to raise objections, if law so permits. The provisions of the Arbitration Act clearly envisage the filing of objections on the grounds specified thereunder and that being the law, the objectors are well within their rights to raise objections and ask for setting aside or rejecting the award. As mentioned above, the impartiality of the arbitrator has not even been remotely questioned and all that has been mentioned in the various objections is that the arbitrator conducted the proceedings in such a manner which clearly shows legal misconduct. On the merits of the case and while elaborating the legal misconduct, it is argued that the arbitrator violated the principles of natural justice inasmuch as even though the matter was fixed for arguments for February 6, 1993, when it was adjourned for the said purpose on January 24, 1993, the....
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.... and S. Raghbir Singh was recorded on January 24, 1993, and the award was given on January 27, 1993. The contention of learned counsel, thus, that the award was pronounced before the date fixed and without giving any chance to counsel representing the parties to address arguments is devoid of any merit being against the records of the case. The second contention raised by learned counsel for the objectors that since the parties, i.e., Gurcharan Singh and Raghbir Singh, were heard separately and not in the presence of each other, the award was vitiated, has no merit. However, for his aforesaid contention, learned counsel relies upon Payyavula Vengamma v. Payyavula Kesanna, AIR 1953 SC 21 and Bakhtawar Lal v. Ram Kumar, AIR 1986 All 160. It is on January 17, 1993, that the arbitrator after receiving the rejoinders to each other respective replies to the respective claim petitions adjourned the matter to January 24,1993, on which date only S. Gurcharan Singh and S. Raghubir Singh, i.e., the concerned parties were to appear without their counsel to make efforts at reconciliation. As mentioned above, on January 24, 1993, the joint statement of the parties, i.e., Gurcharan Singh an....
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.... maintenance and residence. When the plaintiff was being examined as P.W.-1, in the suit all the parties filed a petition under section 21 of the Arbitration Act agreeing to appoint K as the "sole arbitrator" for settling the disputes in the suit and to abide by his decision. The petition filed by the parties did not give any special powers to the arbitrator. The plaint, the written statement and the other records were agreed to be sent to him for his decision and the arbitrator was directed to make his award after perusing the plaint and written statement which were given to him along with the order. The arbitrator examined the defendant in the absence of the plaintiff and also perused the will without giving an opportunity to the plaintiff to have her say in the matter. The statement which was obtained from the defendant contained several statements of fact, which did not find a place in his written statement. On the facts aforesaid, it was held that the procedure adopted by the arbitrator was obviously contrary to the principles of natural justice. The arbitrator was guilty of legal misconduct and there was sufficient material to vitiate the award. The facts of the cited case re....
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....the respondents about that hearing. While considering the relevant clause of the arbitration agreement it was found that the same did not entitle the arbitrator to hear one or the other party in the absence of each other. In paragraph 10 of the reported case, it has been mentioned that "It was subsequently that the appellant changed his case by pleading that the arbitrator did not hear the two parties in the absence of each other and wanted to establish that the arbitrator heard both of them together and jointly. Neither before the court below nor before us any evidence from the record was shown which could establish that the two parties were heard jointly by the arbitrator. The arbitrator had filed along with the award other papers which were maintained by him. None of them is a minute of the proceedings of the arbitration. It is not established from these papers that any joint meeting had taken place. In fact in the award the arbitrator himself admitted that he had heard the parties separately and one party was heard in the absence of other." It shall be, thus, seen that the facts of the aforesaid case are entirely different and, therefore, the judgment of the Supreme Court in Ba....
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.... Rules, it shall be seen from the pleadings that it is mentioned that the petitioner, Gurcharan Singh, was the brother of Raghbir Singh, respondent, and both of them had floated a company initially as partners which was subsequently converted into a private limited company with almost equal shares. It is also mentioned in paragraph 3 that there were numerous other disputes between the two brothers and their families regarding the properties built from the earnings of the Raghbir Cycles (P) Ltd. which were pending in various courts at Ludhiana, in this court and in the Supreme Court. Paragraph 4 further mentions that the parties agree that the entire disputes between the families of both the brothers concerning Raghbir Cycles (P) Ltd. and their other concerns and properties may be referred to an umpire so that the same may be decided once for ever. In paragraph 5, it has been mentioned that the decision given by the umpire would be acceptable to both the brothers and their families and they would be bound by the same in all respects. In so far as this application is concerned, the same was also filed jointly and it does contain the name of counsel for the respondents, Shri J. S. Nar....
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....not do that which even court had no jurisdiction to do. It is in the same strain that objections have been raised to clause (iii) of paragraph 6 of the award which is with regard to the will executed by Smt. Chanan Devi in favour of Paranjit Singh son of Raghbir Singh, which clause reads thus : "The alleged will of Smt. Chanan Devi, mother of the petitioner and the respondent allegedly executed by her on January 10, 1984, in favour of Paranjit Singh, s/o Shri Raghbir Singh, respondent and witnessed by respondent attested as witnesses by the said respondent Shri Raghbir Singh and a neighbour of his and which was got post facto registered on October 7, 1985, after the death of Smt. Chanan Devi on November 2, 1984, is held to be invalid in law and the beneficiary named therein shall acquire no benefit thereunder." Besides, of course, raising the same objection, as has been noticed above, in regard to sub-para (vii), it is further the contention of learned counsel that the will could be declared invalid only by an appropriate court and the arbitrator had no jurisdiction to deal with the matter, thus, rendering the award to be wholly illegal and without jurisdiction. Raising the s....
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...., the allegations in the two company petitions, as have been noticed in the earlier part of the judgment, clearly demonstrate that there were serious allegations against the objectors with regard to the shares owned by Smt. Chanan Devi which had devolved upon the beneficiary under the will. Obviously, there was dispute with regard to increase in the shareholding of the objectors and serious allegations of siphoning off the assets of the company with a view to raise the shareholding of the objectors were raised in the pleadings. There were also allegations coming forth that by diverting the assets of the company the objectors had purchased properties in their individual names. The specific allegation in Company Petition No. 79 of 1987 filed under section 155 of the Companies Act, 1956, for rectification of the register of members is that Smt. Chanan Devi, who was the mother of petitioner No. 1 and respondent No. 2, held 1,500 shares. She died on November 2, 1984. These shares, it was further pleaded, had been illegally allotted to Paranjit Singh son of respondent No. 2 and that the two sons of Smt. Chanan Devi, petitioner No. 1 and respondent No. 2, were equally entitled to the exte....
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....ed or accepted by the arbitrator. That was to be done, if at all, by this court while dealing with these petitions and in so far as the arbitrator is concerned, he was to reconcile the disputes between the parties, as is clearly envisaged in the applications culminating in the order of reference as also the order itself. There is another significant way of looking at the matter. The scope of one of the company petitions was to liquidate the company as such. As mentioned earlier, the said petition had matured and in fact arguments almost in their entirety were heard. If the plea of petitioners was to succeed, the company would have been liquidated. It is relevant to mention that it is at that stage when the arguments were heard that applications under rule 9 of the Companies (Court) Rules, 1959, for appointment of an umpire and the other under Order 23, rule 3 read with section 151 of the Civil Procedure Code and rule 9 of the Companies (Court) Rules, 1959, were filed. The parties to the litigation were conscious of the fact that there could be an order liquidating the company. It is in that back ground that the parties came to this court in the applications, referred to above, a....
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....hat he would ban entry for one cinema and not for the other. Non-mentioning of the properties and distribution and management thereof which are at Calcutta, S.C.O. 3, Bentick Street, and Overseas Cycles Ltd. in the award, appears to this court of no significance whatsoever and the contention of learned counsel that the award has to be remitted to the arbitrator for that reason carries no conviction with this court. That apart, it has been specifically mentioned in the award that S.C.O. 3, at Bentick Street, Calcutta, is the rented property of the Overseas Cycles Company and Raghbir Cycles Pvt. Ltd. has no right of any kind in and over the said premises. It is also mentioned in clause (ix) of the award that Flat No. 1 (First Floor), 10, Lord Sinha Road, Calcutta, is the absolute and exclusive property of Shri Gurcharan Singh as an individual. Mr. Narang, learned counsel appearing for the objectors in rebuttal, has touched a new point by contending that clause (v) of the award rendered by the arbitrator would create a deadlock in the company. Mr. Narang also contends that Smt. Hardeep Kaur is the sole proprietor of Raghbir Bicycles International and there was no dispute of any ....