Calcutta High Court
Mohan Lal Saraf vs Suresh Kumar Saraf & Anr on 20 January, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OD-10
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
AP/177/2024
MOHAN LAL SARAF
VS
SURESH KUMAR SARAF & ANR.
AP/184/2024
MOHAN LAL SARAF
VS
SURESH KUMAR SARAF & ANR.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date : 20th January, 2025.
Appearance:
Mr.Mainak Bose, Sr. Adv.
Mr. Rhul Singh, Adv.
Ms. Prabhleen Bharara, Adv.
...for the petitioner.
Mr. Jishnu Chowdhury, Sr. Adv.
Mr. Ritoban Sarkar, Adv.
Mrs. Somali Mukhopadhyay, Adv.
Ms. Sampa Ghosh, Adv.
. . . for the respondent no.1.
The Court: AP/177/2024 is an application under Section 9 of the
Arbitration and Conciliation Act, 1996. The application has been filed post
the arbitral award dated September 9, 2024.
The petitioner, who was the unsuccessful claimant in the arbitral
proceedings, prays for an injunction restraining the respondent no.1 and his
2
men, agents and assigns from selling, alienating, encumbering, transferring,
charging or creating any third party interest with regard to the properties
mentioned in the Memorandum of Understanding (in short MOU) dated
August 1, 2012. Further prayer is to restrain the respondent no.1 and his
men, agents and assigns from claiming to be the owner or shareholder of
the assets which form a part of the petitioner’s entitlement under the said
MOU. The MOU was in the nature of a family settlement.
Mr. Mainak Bose, learned Senior Advocate appearing for the
petitioner submits that under the terms and conditions of the MOU entered
into between Banwari Lal Saraf, Girdhari Saraf, Suresh Kumar Saraf and
Mohan Lal Saraf, 40% of the total value of the assets Rs.11,65,09,109/-,
amounting to Rs. 4,66,03,643/-, fell within the share of the petitioner. The
respondent no.1 had been enjoying the assets and properties which were to
be transferred to the petitioner under Schedule-H of the MOU. The
respondent no.1 did not discharge his obligation under the said MOU.
According to Mr. Bose, the parties were governed by Mitakshara School of
Law and as such the female members were not made signatories to the
MOU, although part of the assets (mainly in the form of shares) were in their
names. The recital of the MOU would indicate that all the properties
belonging to the entire family, male and female members included, were
brought within a common pool and thereafter distributed only amongst 3
groups Banwari Lal Saraf and Ginni Devi Saraf, Suresh Kumar Saraf and
Madhu Saraf, Mohan Lal Saraf and Alka Saraf. The fact that the parties had
given effect to the said MOU would be evident from the transfer of shares
worth Rs.1,38,00,000/- in favour of the petitioner, by Banwari Lal Saraf.
3
Mr. Bose submits that the sale of shares by Banwari Lal and Ginni
Devi were from their common pool i.e. 20% of the value of the assets which
they had acquired under the said MOU. Such transfer would show that the
parties had honoured the MOU and assets had vested in the parties,
including the petitioner, but the petitioner did not get his entire share.
Drawing the attention of the Court to the award, Mr. Bose submits
that the observations of the learned Arbitrator were contrary to the evidence.
The learned Arbitrator did not take into consideration the evidence before
him and erroneously held that the MOU had become inchoate. At least
transfer of those assets by Suresh upon executing appropriate deeds in
favour of the petitioner in terms of the MOU, ought to have been awarded.
Even if the learned Arbitrator found that after the demise of the parents, the
shares or the assets in their pool could not be dealt with on the basis of the
MOU as their daughter (heir), namely, Kusum Jhunjhunwala was not a
party to the proceedings, the other obligations of the respondent no.1
(Suresh) ought to have been directed and award should have been made
with regard to those.
According to Mr. Bose, while the father had discharged his
obligation under the MOU by transferring shares to the petitioner, the
brother i.e. Suresh did not do so.
Under such circumstances, the disputes arose and Suresh was
obliged to execute a deed of gift in respect of immovable property as also
shares as mentioned in Schedule-H. The notice invoking arbitration was on
account of failure of Suresh to discharge his obligation as per Schedule-H.
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The petitioner did not have any claim against either the parents or the other
heirs of the parents.
Mr. Chowdhury, learned Senior Advocate for the respondent no.1,
submits that when the learned Arbitrator had held that the MOU dated
August 1, 2012 no longer existed, the question of an injunction against the
respondent no.1 from dealing with the properties or claiming ownership in
respect of the shares could not arise. The learned Arbitrator had specifically
observed that both Banwari Lal and Ginni Devi had sold out some of the
shares to the parties as also to other heirs. This, itself, would indicate that
the parties had not proceeded to give effect to the said MOU.
Mr. Chowdhury’s contention is that an omnibus prayer for
injunction should not be entertained by this Court in the absence of any
specification with regard to the assets which the petitioner was allegedly
entitled and which were to be transferred by Suresh. There was no pleading
that the assets were in the risk of being damaged, destroyed or alienated.
Referring to Section 9 of the Act, Mr. Chowdhury submits that the award
would indicate that the properties of Suresh were not subject matter of the
MOU. The learned Arbitrator was of the view that the parties had not come
upon their respective properties, on the basis of the MOU.
Having heard the rival contentions of the parties, this Court, prima
facie, finds that considerable shares were sold by Banwari Lal and Ginni
Devi to other persons, apart from the petitioner. Although Mr. Bose’s
contention is that the sale of the shares by Banwari Lal was in furtherance
to the MOU and that such sale will indicate that the parties had acted in
terms of MOU, this Court does not find from Schedule-H, which was the
5
allocation to be made in favour of the petitioner, that the father was required
to transfer any share to the petitioner as part of 40% of the petitioner’s
allocation. The award further indicates that the Schedule G1 which forms
part of what Suresh was supposed to gift or transfer to the petitioner was
missing. The learned Arbitrator specifically observed that the shares
mentioned in the MOU were not available as they had been sold. In the
decision of Dirk India Private Limited-Versus-Maharashtra State
Electricity Generation Company Limited reported in 2013 SCC OnLine
Bom 481, the Bombay High Court held that an interim measure of
protection within the meaning of Section 9(ii) was intended to protect the
fruits of a successful conclusion of arbitral proceedings. A party whose claim
has been rejected in the course of the arbitral proceedings, could not
obviously have an arbitral award enforced in accordance with Section 36.
The object and purpose of an interim measure after the passing of the
arbitral award, but before it could be enforced was to secure the property,
goods or amount for the benefit of the party who could seek enforcement.
In the present case, the situation is reverse. A party whose claim
has been rejected on the ground that the MOU was unworkable, inchoate
and specific performance of the same could not be allowed, cannot seek an
injunction in respect of the properties of the respondent no.1(successful
party). This Court does not find any observation or conclusion of the learned
Arbitrator that Banwari Lal and Ginni Devi had sold their shares from their
20% allocation under the MOU and as such this Court, prima facie,
concludes that the parties had not given effect to the MOU. In the decision
of Nussli Switzerland Ltd-Versus-Organizing Committee
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Commonwealth Games, 2010 reported in 2014 SCC OnLine Del.4834,
the Delhi High Court held that legislative intent was not to confer an all
embracing and all pervading power upon the Court adjudicating a post-
award application under Section 9 of the said Act.
Unless the Court is satisfied prima facie, that the petitioner has
been deprived although the other parties to the MOU had benefited from the
same and taken their properties, as per the Schedules, injunction cannot be
granted. Moreover, the petitioner raised the dispute in 2023 although
Banwari Lal died in 2018 and Ginni Devi in 2014.
Accordingly, the application is disposed of without granting any of
the prayers of the petitioner.
All actions taken by the respondent no.1 in the meantime, will
abide by the result of the application under Section 34 of the Arbitration
and Conciliation Act, 1996.
AP /184/2024 will appear in the list for further hearing on
February 6, 2025 at 3 p.m.
(SHAMPA SARKAR, J.)
Pa/snn.
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