Chandra Prakash Agarwal v. Bhagirath Agarwal (SC)
BS252877
SUPREME COURT OF INDIA
Before:- R.C. Lahoti, G.P. Mathur and Tarun Chatterjee, JJ.
IAs Nos. 1-3 in Civil Appeal No. 6413 of 1999. D/d.
4.2.2005.
Chandra Prakash Agarwal - Appellants
Versus
Bhagirath Agarwal - Respondents
Arbitration Act, 1940, Sections 13 and 41 - Arbitration and Conciliation Act, 1996, Sections 24 and 25 - Stranger to proceeding - Stranger to the arbitral proceedings cannot be joined as party - Even arbitration can not be permitted to be joined as party to any legal proceedings initiated by the stranger.
[Para 1]
ORDER
IA No. 1
R.C. Lahoti, J. - The applicant Manipur Tea Company Pvt. Ltd. is a stranger to the proceedings pending before the arbitrator Justice (Retd.) Monoj Kumar Mukherjee. The parties to arbitration are Bhagirath Agarwal and Chandra Prakash Agarwal, who are partners of Hindustan Tea Company. The applicant cannot be allowed relief either by way of intervention or by way of any substantive relief in these proceedings either by this Court or by directing the arbitrator to entertain its prayer. The applicant is at liberty to pursue such remedy as may be available to it under the law for vindicating its grievance raised in the application. The arbitrator is only acting as a tribunal and he cannot be permitted to be joined as party to any legal proceedings initiated by the applicant. The application be treated as disposed of.
IA No. 2
2. The applicant is aggrieved by some orders passed by the learned arbitrator at an interim stage of the proceedings and seeks directions from this Court in that regard. Suffice it to observe that once an arbitrator has been appointed by the Court any party feeling aggrieved by any interim order or direction made by the arbitrator is at liberty to pursue such remedy as may be available to him under the law. That being the position of law, the learned counsel for the applicant seeks to withdraw the application reserving liberty to pursue such other remedy as may be available to the applicant. We record the statement of the learned counsel and dismiss the application as withdrawn.
IA No. 3
3. Bhagirath Agarwal, the applicant herein has moved this application for the following relief:
It is, therefore, respectfully prayed that this Honble Court may be pleased to direct the appellant to pay to the respondent the sum admissible under the terms and compromise contained in the order dated 15-2-1991 passed by this Honble Court and/or to pass such other and
Order
1. Heard the learned counsel in presence of their respective parties. The parties having agreed to the modification of the orders of the Calcutta High Court dated 16-7-1990 and 17-9-1990 appointing the Receivers, the said orders be and are hereby substituted by the following terms and conditions:
Terms and Conditions
1. The petitioners will pay a sum of Rs 15 lakhs every year to the respondent as a minimum guaranteed profit (amount) irrespective of any profit being earned or not.
2. The profit will be paid in equal monthly instalments starting from 1-4-1991 and will be paid by the first fortnight of each month. The Receiver will forthwith hand over the charge of the gardens to the petitioners. The money lying with the Receiver will be also handed over to the petitioners, after deducting Rs 15 lakhs therefrom and be paid to the respondent the said sum of Rs 15 lakhs immediately, the said sum of Rs 15 lakhs however will be subject to the accounts to be adjusted by the arbitrator. Similarly, the balance amount paid to the firm including the sale proceeds till 31-3-1991 shall be equally subject to the final adjustment of accounts by the arbitrator.
3. The petitioners after taking over management shall be responsible for all taxes, duties, cesses including statutory liabilities and otherwise.
4. The petitioners shall not sell, mortgage, encumber, create any charge or part with possession of any immovable property of the firm and its tea gardens or its forest produce including timber and bamboos. The petitioners shall not create any agency at any time and shall not give the firm and/or its properties on lease or licence.
5. All sales of tea shall be by public auction and through M/s J. Thomas & Co. Pvt. Ltd. a leading tea broker.
further order which may be found necessary in the circumstances of the case.
4. The prayer made in this application is vehemently opposed on behalf of the other party Chandra Prakash Agarwal submitting that a similar prayer was made earlier whereon this Court did not make any order. Attention is invited to the order dated 1-11-1993 passed by this Court.
5. However, the learned counsel for the applicant Bhagirath Agarwal submits that Chandra Prakash Agarwal has defaulted in complying with the direction contained in the order dated 15-2-1991 to the effect that: The petitioners will pay a sum of Rs. 15 lakhs every year to the respondent as a minimum guaranteed profit (amount) irrespective of any profit being earned or not. Mr Gopal Subramanium, learned Senior Counsel for Chandra Prakash Agarwal submits that there has been a subsequent memorandum of understanding and several other subsequent events which disentitle the applicant Bhagirath from claiming the amount of Rs. 15 lakhs every year.
6. It is clear that this Court while passing the order dated 15-2-1991 had expected the arbitration proceedings to be concluded and award made by the arbitrator within a period of one year and that is why made certain directions to remain operative for a period of one year and to continue further unless modified by the Court till the arbitrator gives his award. Now, about 14 years have passed and the arbitration proceedings are still continuing. In view of the subsequent events, we leave it open to the parties to seek suitable directions from the arbitrator and the arbitrator may after hearing the parties
6. The petitioners shall undertake to ensure that necessary steps are taken for improvement in the garden and its plantations and such improvement/increase shall not be less than 10 per cent per annum.
7. The petitioners shall purchase the following items only through tenders:
Fertilisers, pesticides, insecticides and tea chests or tea bags and any other item valuing more than Rs 10,000 in a year.
8. The respondent at his own cost shall be entitled to post accountant at the garden as well as at the Head Office who will be entitled to look into the books of the accounts regularly. However, the accountant posted in the garden will be eligible for looking into the books on every working day of the garden as a full time while at the Head Office on every working day on two hourly basis. The accountant will be eligible to take xerox copies of the accounts.
9. In case of their being any higher profit of the firm the respondent will be entitled to higher profit according to his share.
10. The petitioners are restrained by injunction from disposing of the property of the firm movable and immovable.
11. The petitioners undertake to this Honble Court to pay the said Rs 15 lakhs minimum guarantee in equal monthly instalments as stated above.
12. That the above conditions are applicable for one year as an interim arrangement.
13. The respondent or the petitioners will be at liberty to move this Honble Court in case any difficulty arises in observing the above conditions.
2. The terms and conditions shall also form part of the record. These terms and conditions will be initially for one year only and unless modified by the Court thereafter shall continue till the arbitrator gives his award. The special leave petition is disposed of accordingly.
and taking into consideration all the relevant facts and circumstances, including events subsequent to the date of passing of the order dated 15-2-1991, make such directions as may be just and proper, including an interim award in accordance with law, uninfluenced by the directions contained in the order dated 15-2-1991 that the direction made by this Court would continue till the arbitrator gives his award unless modified by the Court. In other words, we may say that the word award as occurring in the order of this Court shall include interim award also.
7. In addition, we request the learned arbitrator to conclude the arbitration proceedings as expeditiously as possible and dispose of them by making a final award.
8. IA stands disposed of.
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