Karnataka High Court
Amritlal S/O Pukhraj Jain vs Naresh S/O Pukhraj Jain on 14 September, 2023
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NC: 2023:KHC-D:10614
MFA No. 103590 of 2016
C/W MFA No. 103513 of 2016, MFA No.
103591 of 2016
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 14TH DAY OF SEPTEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
MISCELLANEOUS FIRST APPEAL NO. 103590 OF 2016 (AA)
C/W
MISCELLANEOUS FIRST APPEAL NO. 103513 OF 2016
MISCELLANEOUS FIRST APPEAL NO. 103591 OF 2016
IN MFA NO.103590/2016:
BETWEEN:
AMRITLAL
S/O PUKHRAJ JAIN,
AGE: 58 YEARS, OCC: BUSINESS,
R/O: KESHWAPUR, HUBBALLI.
...APPELLANT
(BY SRI. PRAKASH K. JAWALKAR, ADVOCATE)
AND:
Digitally 1. NARESH
signed by
GIRIJA A
GIRIJA A BYAHATTI
S/O PUKHRAJ JAIN,
BYAHATTI Date:
2023.09.20 AGE: 47 YEARS, OCC: BUSINESS,
10:31:25
+0530
R/O: 19/2, NEW JAWALI BAZAR,
HUBBALLI-580028.
2. PRAKASH
S/O PUKHRAJ JAIN,
AGE: 55 YEARS, OCC: BUSINESS,
R/O: 19/2, NEW JAWALI BAZAR,
HUBBALLI-580028.
PRESENTLY RESIDING AT:
NO: 85, GANDHI BAZAR,
5TH FLOOR, "RAJNIVAS",
VAIBHAV APARTMENTS,
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MFA No. 103590 of 2016
C/W MFA No. 103513 of 2016, MFA No.
103591 of 2016
BASAVANAGUDI,
BENGALURU-560004.
3. RAAJA
S/O PUKHRAJ JAIN,
AGE: 51 YEARS, OCC: HOUSEHOLD,
R/O: 401/A, 4TH FLOOR,
STERLING TOWERS,
H.G. MARG, GAMDEVI,
MUMBAI-07.
4. SMT. MOHANBAI
W/O LATE PUKHRAJ JAIN,
AGE: 83 YEARS, OCC: HOUSEHOLD,
R/O: H.NO.40,
SHRIMAD RAJACHANDRA ASHRAM,
POST-BORIA, STATION AGAS,
VIA ANAND, GUJARAT-388130.
*AMENDMENT CARRIEDOUT VIDE ORDER DATED
24.02.2020. REPONDENT NO.4 DIED ON 23.01.2020,
APPELLANT AND RESPONDENTS NO.1,2,3,5 AND 6 ARE
LEGAL HEIRS OF DECEASED RESPONDENT NO.4*
5. SMT. LEELA
W/O NARSINGMAL HUNDA,
AGE: 62 YEARS, OCC: HOUSEHOLD,
R/O: HOUSE NO.26/2,
SHRIMAD RAJCHANDRA ASHRAM,
POST-BORIA, STATION AGAS,
VIA ANAND, GUJARAT-388130.
6. SMT. KARUNA
W/O ASHOK OSTWAL,
AGE: 56 YEARS, OCC: HOUSEHOLD,
R/O: 2805/2, BEHIND KANIKA MAHAL,
ASHOKA ROAD CROSS, MAHAVEERNAGAR,
MYSURU-570001.
...RESPONDENTS
(BY SRI. A G WAJAPE, ADVOCATE FOR R1,
SRI. G.S.MOT, ADVOCATE FOR R2 AND R3,
SRI. SUBHASH J BADDI, ADVOCATE FOR R5 AND R6,
R1, R2, R3, R5 AND R6 ARE LEGAL HEIRS OF DECEASED R4)
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NC: 2023:KHC-D:10614
MFA No. 103590 of 2016
C/W MFA No. 103513 of 2016, MFA No.
103591 of 2016
THIS MFA IS FILED U/S. 37(1)(A) OF THE ARBITRATION
AND CONCILIATION ACT, 1996, FILED AGAINST THE JUDGMENT
AND DECREE DTD:27.09.2016 PASSED IN ARBITRATION
APPLICATION NO.10/2016 ON THE FILE OF THE PRINCIPAL
DISTRICT AND SESSIONS JUDGE, DHARWAD, PARTLY ALLOWING
THE PETITION FILED UNDER SECTION 9 OF ARBITRATION AND
CONCILIATION ACT 1996.
IN MFA NO.103513/2016:
BETWEEN:
SHRI. NARESH
S/O PUKHRAJ JAIN,
AGE: 45 YEARS, OCC: BUSINESS,
R/O: NO.19/2, RAJASHREE,
NEW JAVALI SAAL BAZAR,
HUBBALLI-580028.
...APPELLANT
(BY SRI. A.G.WAJAPE, ADVOCATE)
AND:
1. SHRI. AMRITLAL P. JAIN,
AGE: 56 YEARS, OCC: BUSINESS,
R/O: KESHWAPUR, HUBBALLI-580028.
2. SHRI. PRAKASH
S/O PUKHRAJ JAIN,
AGE: 54 YEARS, OCC: BUSINESS,
R/O NO.19/2, RAJASHREE,
NEW JAVALI SAAL BAZAR,
HUBBALLI-580028.
PRESENTLY RESIDING AT NO.85,
GANDHI BAZAAR, 5TH FLOOR,
RAJNIVAS, VAIBHAV APARTMENTS,
BASAVANAGUDI, BENGALURU-560004.
3. SHRI. RAAJA P. JAIN
AGE: 50 YEARS, OCC: BUSINESS,
R/O: NO.401/A, 4TH FLOOR,
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C/W MFA No. 103513 of 2016, MFA No.
103591 of 2016
STERLING TOWERS, H.G. MARG,
GAMDEVI, MUMBAI-07.
4. SMT. MOHANBAI
W/O POUKHRAJ JAIN
AGE: 81 YEARS,
OCC: HOUSEHOLD WORK,
R/O: NO.40,
SHRIMAD RAJACHANDRA ASHRAM,
POST BORIA STATION, AGAS VIA ANAND
GUJRAT-388130.
5. SMT. LEELA
W/O NARSINGMAL HUNDA
AGE: 62 YEARS,
OCC: HOUSEHOLD WORK,
R/O: NO.28/2,
SHRIMAD RAJACHANDRA ASHRAM,
POST BORIA STATION, AGAS VIA ANAND,
GUJRAT-388130.
6. SMT. KARUNA
W/O ASHOK OSTWAL,
AGE: 56 YEARS, OCC: HOUSEHOLD WORK,
R/O: NO.2805/2,
BEHIND KANIKA MAHAL,
ASHOK ROAD CROSS,
MAHAVEER NAGAR,
MYSURU-570001.
...RESPONDENTS
(BY SRI. PRAKASH K. JAWALKAR, ADVOCATE FOR C/R1,
R4 TO R6 ARE DELETED,
SRI. G.S.MOT, ADVOCATE FOR R2 TO R3)
THIS MFA IS FILED U/S.37(1)(A) OF THE ARBITRATION
ANDCONCILIATION ACT, 1996, AGAINST THE ORDER
DATED:27.09.2016, PASSED IN AA NO.10/2016 ON THE FILE OF
THE PRINCIPAL DISTRICT AND SESSIONS JUDGE, DHARWAD,
PARTLY ALLOWING THE APPLICATION U/S.9 OF ARBITRATION
AND CONCILIATION ACT.
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NC: 2023:KHC-D:10614
MFA No. 103590 of 2016
C/W MFA No. 103513 of 2016, MFA No.
103591 of 2016
IN MFA NO.103591/2016:
BETWEEN:
AMRITLAL
S/O PUKHRAJ JAIN,
AGE: 58 YEARS, OCC: BUSINESS,
R/O: KESHWAPUR, HUBBALLI.
...APPELLANT
(BY SRI. PRAKASH K. JAWALKAR, ADVOCATE)
AND:
1. NARESH
S/O PUKHRAJ JAIN,
AGE: 47 YEARS, OCC: BUSINESS,
R/O: 19/2, NEW JAWALI BAZAR,
HUBBALLI-580028.
2. PRAKASH
S/O PUKHRAJ JAIN,
AGE: 55 YEARS, OCC: BUSINESS,
R/O: 19/2, NEW JAWALI BAZAR,
HUBBALLI-580028.
PRESENTLY RESIDING AT:
NO: 85, GANDHI BAZAR,
5TH FLOOR, "RAJNIVAS",
VAIBHAV APARTMENTS,
BASAVANAGUDI,
BENGALURU-560004.
3. RAAJA
S/O PUKHRAJ JAIN,
AGE: 51 YEARS, OCC: HOUSEHOLD,
R/O: 401/A, 4TH FLOOR,
STERLING TOWERS,
H.G. MARG, GAMDEVI,
MUMBAI-07.
4. SMT. MOHANBAI
W/O LATE PUKHRAJ JAIN,
AGE: 83 YEARS, OCC: HOUSEHOLD,
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NC: 2023:KHC-D:10614
MFA No. 103590 of 2016
C/W MFA No. 103513 of 2016, MFA No.
103591 of 2016
R/O: H.NO.40,
SHRIMAD RAJACHANDRA ASHRAM,
POST-BORIA, STATION AGAS,
VIA ANAND, GUJARAT-388130.
*AMENDMENT CARRIEDOUT VIDE ORDER DATED
24.02.2020. REPONDENT NO.4 DIED ON 23.01.2020,
APPELLANT AND RESPONDENTS NO.1,2,3,5 AND 6 ARE
LEGAL HEIRS OF DECEASED RESPONDENT NO.4*
5. SMT. LEELA
W/O NARSINGMAL HUNDA,
AGE: 62 YEARS, OCC: HOUSEHOLD,
R/O: HOUSE NO.26/2,
SHRIMAD RAJCHANDRA ASHRAM,
POST-BORIA, STATION AGAS,
VIA ANAND, GUJARAT-388130.
6. SMT. KARUNA
W/O ASHOK OSTWAL,
AGE: 56 YEARS, OCC: HOUSEHOLD,
R/O: 2805/2, BEHIND KANIKA MAHAL,
ASHOKA ROAD CROSS, MAHAVEERNAGAR,
MYSURU-570001.
...RESPONDENTS
(BY SRI. A G WAJAPE, ADVOCATE FOR R1,
SRI. G.S.MOT, ADVOCATE FOR R2 AND R3,
SRI. SUBHASH J BADDI, ADVOCATE FOR R5 AND R6,
R1, R2, R3, R5 AND R6 ARE LEGAL HEIRS OF DECEASED R4)
THIS MFA IS FILED U/S. 37(1) OF THE ARBITRATION AND
CONCILIATION ACT, 1996, FILED AGAINST THE JUDGMENT AND
DECREE DTD:27.09.2016 PASSED IN ARBITRATION APPLICATION
NO.3/2015 ON THE FILE OF THE PRINCIPAL DISTRICT AND
SESSIONS JUDGE, DHARWAD, DISMISSING THE PETITION FILED
UNDER SECTION 9 OF ARBITRATION AND CONCILIATION ACT
1996.
THESE APPEALS, COMING ON FOR ADMISSION THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
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MFA No. 103590 of 2016
C/W MFA No. 103513 of 2016, MFA No.
103591 of 2016
COMMON JUDGMENT
1. These three appeals arise from the order passed in Arbitration Application No.10/2016 clubbed with Arbitration Application No.3/2015, filed under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996', for brevity).
2. The Arbitration Application No.3/2015 is filed with a prayer to restrain respondents No.1 and 2 from selling the assets of M/s. JBM Industries, Hubballi, pending the arbitration proceedings and settlement of accounts. The prayer is also sought to restrain respondents No.1 and 2 from utilizing the funds of the firm in any manner till the disposal of the arbitration proceedings. Further prayer is made to direct the respondents No.1 and 2 to transfer all the amounts standing in their individual name to the firm's account and it is also prayed that the respondents should be restrained from interfering in -8- NC: 2023:KHC-D:10614 MFA No. 103590 of 2016 C/W MFA No. 103513 of 2016, MFA No. 103591 of 2016 the petitioner's involvement in the business of the firm as a partner in M/s. JBM Industries.
3. One more Arbitration Application No.10/2016 is also filed to appoint a Receiver to manage the business of the firm and to file monthly report of banking transactions and also of the stocks and sales made by the firm to the Court pending disposal of the arbitration proceedings or settlement of the accounts of the firm and prayer is also made to restrain the respondents from operating the accounts of the aforementioned firm without taking the consent of the petitioner. A prayer is also made to direct the Receiver to receive the accumulated profits, interest on capital and remuneration of the petitioner pending the arbitration proceedings and settlement of accounts.
4. Both the applications were resisted by the respondents. The jurisdictional Court has dismissed the Arbitration Application No.10/2016 for -9- NC: 2023:KHC-D:10614 MFA No. 103590 of 2016 C/W MFA No. 103513 of 2016, MFA No. 103591 of 2016 appointment of the Receiver and dismissed the prayer to restrain the respondents from operating the accounts of the firm. However, the Court directed the respondents to deposit Rs.2,50,00,000/- before the Court.
5. Aggrieved by the dismissal of the Arbitration Application No.10/2016 seeking appointment of the Receiver MFA No.103590/2016 is filed and MFA No.103591/2016 is filed challenging the order of dismissal of the Arbitration Application No.3/2016 seeking temporary injunction.
6. Aggrieved by the order directing the respondents to deposit the amount, respondent No.1 in the said arbitration applications filed MFA No.103513/2016.
7. The admitted facts narrated in the pleadings reveal that;
7.1. The appellant sought the dispute relating to partnership firm in which he is a partner along
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NC: 2023:KHC-D:10614 MFA No. 103590 of 2016 C/W MFA No. 103513 of 2016, MFA No. 103591 of 2016 with the respondents, to be resolved through the Arbitration. The Arbitrator was appointed in terms of the order passed by this Court under Section 11 of the Act of 1996. The respondents filed counter claim before the Arbitrator. 7.2. The Arbitrator has passed a preliminary award in favour of the present appellant. Counter claim is rejected.
7.3. The award passed by the Arbitrator is challenged under Section 34 of the Act of 1996 before the District Judge, Dharwad in Arbitration Suit No.2 to 4 of 2019. 7.4. Out of three cases referred to above, one case is filed challenging the award passed in favour of the present appellant/petitioner before the Arbitrator and one case is filed challenging the order rejecting the counter claim.
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NC: 2023:KHC-D:10614 MFA No. 103590 of 2016 C/W MFA No. 103513 of 2016, MFA No. 103591 of 2016 7.5. The legal representatives of the deceased partner have also filed one application before the District Court, challenging the aforementioned award.
8. This case was listed before this Court on four occasions. This Court asked the parties to explore the possibility of settlement and for this reason, the matters were adjourned on three occasions and thereafter, the parties submitted before the Court that the dispute is not resolved. Hence the matters are taken up for consideration on merits.
9. It is also brought to the notice of this Court that the applications under Section 34(2) filed under the Act of 1996 pending before the District Court are heard on merits and the judgment is awaited. Both the parties would submit that the matter was heard long time ago and thereafter the matter was adjourned seeking some clarifications and the clarifications are furnished to the Court and the judgment is awaited.
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10. Having regard to the aforementioned facts and circumstances of the case, this Court is of the view that this is not a fit case to appoint a Receiver at this juncture. The arbitration proceeding before the arbitrator is already concluded and application challenging the award is heard on merits and judgment on merits is awaited. Since the judgment in the proceedings, where the arbitration award is challenged, is awaited after conclusion of the final hearing in those matters, this Court is of the view that the appointment of the Receiver at this juncture is not warranted.
11. Learned counsel for the appellant and the respondents jointly submit that the appeals be disposed of with a direction to the Court where Section 34 application is pending to dispose of the applications within a time frame.
12. Considering the object of the Arbitration and Conciliation Act, 1996, this Court is of the view that
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NC: 2023:KHC-D:10614 MFA No. 103590 of 2016 C/W MFA No. 103513 of 2016, MFA No. 103591 of 2016 the interest of justice would be met if the applications under Section 34 are decided within 45 days from the date of the receipt of this order. This Court is fixing 45 days time keeping in mind the submissions made by both the parties that the applications pending before the learned District Judge are already heard on merits and cases are reserved for judgment.
13. Hence, the appeals are disposed of with the following observation:
a) The jurisdictional Court shall decide the Arbitration Case No.2/2019, 3/2019 and 4/2019 pending on the file of the Principal District Court, Dharwad, preferably within a period of 45 days from the date of receipt of the copy of this order.
Sd/-
JUDGE gab CT-PA List No.: 1 Sl No.: 32 ..