Case: Rajni Sanghi Vs. Western Indian State Motors Ltd.

is concerned, we find that clause (c) of Section 30 does not attract the principle of ejusdem generis so far as the term otherwise invalid is concerned. That ground for setting aside award is quite wide in amplitude and available to the concerned court if it finds that the award requires to be treated as invalid because on face of the things it runs counter to a valid law prohibiting such an award or when the subject matter of the award has been lawfully dealt with by a statutory authority or a court and it is no longer available for disposal in accordance with the award under consideration. Such a situation is only illustrative and has been enunciated by us in the light of facts obtaining in this case. When the Courts having jurisdiction were allowed to proceed and decide the properties available at Bombay and record a family arrangement in respect of other matters in a company proceeding before the Rajasthan High Court, the judgments and orders in these proceedings cannot be ignored or obliterated on account of pendency of an award still waiting to be made a rule of the court. In such a situation, in our view, the award has to be set aside on the ground that it is otherwise invalid on the date it is being considered for being made a rule of the court. Since this course of action is available and has been rightly adopted by the Delhi High Court, we do not feel necessary to examine the hypothetical question as to whether even in absence of any ground for setting aside such an award, could the court concerned refuse to make the award a rule of the court under Section 17 of the Act if it was confronted with a situation like the one on hand in this case. Such a question need not be answered in the present proceeding. 26. We have already referred to judgments highlighting the significance of family arrangement under Hindu Law and in light of such judgments and considering the scheme of the Act and provisions of Code of Civil Procedure we are satisfied that family arrangements made before the Rajasthan High Court in 1994 before the Company Judge and in 1995 before the Division Bench need to be protected and given pre-eminence over the award which is yet not made the rule of the court. The family arrangement was arrived at in spite of knowing the award for six years and obviously because the parties who are family members, were at loggerheads over the terms of the award. No doubt the family arrangements were initially made only on behalf of three groups who originally signed the agreements for themselves as well as on behalf of their families but the 4th group, i.e., M.K. Sanghi group later decided to go along with that arrangement by opting to withdraw its appeal. Hence we accept the submissions advanced by Mr. Datar, Mr. Pachnanda and Mr. Shyam Divan and hold that if parties settle their disputes amicably by an agreement, even post-award, such settlement/agreement will prevail in view of requirement of the Act that an award will acquire the status of a decree only when it is made a rule of the court after rejection of all objections. In that view of the matter there is no hindrance in law in upholding the family arrangements made before the High Court at Rajasthan as well as judgment of the Bombay High Court which has attained finality. They deserve to have pre-eminence over the award in question. 27. The act of A.K. Sanghi in not honouring his undertaking to withdraw his petition for making the award a rule of court and the attempt made by Vijay Sanghi to obstruct the scheme of reconstruction-cum-family settlement of 1994 by getting transposed as an appellant in Company Appeal No. 30 of 1994 when his father A.K. Sanghi had signed the settlement on behalf of his group, were impermissible conduct of approbate and reprobate on the part of A.K. Sanghi group which should not have been permitted. The status of the head of the family acting as a Karta under the traditional Hindu law deserves to be kept in mind in such a situation. The junior members of the family are bound by decisions of a Karta in matters of family business and property unless it can be pleaded and proved that the head of the family has acted fraudulently or for immoral purposes. We have not been shown any such case on behalf of Vijay Sanghi. In such a situation, ignoring the traditional Hindu law and the rights of the head of the family or Karta has put unnecessary burden not only on the larger family but also upon the courts. 28. We have examined the Division Bench judgment of the Rajasthan High Court under challenge by Rajni Sanghi and we find that the remand order is not on the basis of any defect in the agreements or supplementary agreements but on account of certain technical requirements which should have been ignored when the issues had been settled by all the stake holders by reaching amicable agreement. The companies of family of four brothers are almost like partnerships and when all were agreeable, interest of justice was best subserved by recognizing even the supplementary family settlement of 1995 in favour of Rajni Sanghi as well as the original family arrangement of 1994 accepted by the Company Judge. In that view of the matter the order of remand under challenge at the instance of Rajni Sanghi is set aside and both the family arrangements indicated above are affirmed. If any party fails to act as per those arrangements within three months, the aggrieved party will be free to initiate appropriate proceedings including those of contempt before the concerned High Court or seek execution of the agreements through other appropriate proceedings. Civil Appeal No.3687 of 2006 is allowed to the aforesaid extent and is disposed of accordingly.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]25. So far as the argument in favour of maintaining the award is concerned, we find that clause (c) of Section 30 does not attract the principle of ejusdem generis so far as the term otherwise invalid is concerned. That ground for setting aside award is quite wide in amplitude and available to the concerned court if it finds that the award requires to be treated as invalid because on face of the things it runs counter to a valid law prohibiting such an award or when the subject matter of the award has been lawfully dealt with by a statutory authority or a court and it is no longer available for disposal in accordance with the award under consideration. Such a situation is only illustrative and has been enunciated by us in the light of facts obtaining in this case. When the Courts having jurisdiction were allowed to proceed and decide the properties available at Bombay and record a family arrangement in respect of other matters in a company proceeding before the Rajasthan High Court, the judgments and orders in these proceedings cannot be ignored or obliterated on account of pendency of an award still waiting to be made a rule of the court. In such a situation, in our view, the award has to be set aside on the ground that it is otherwise invalid on the date it is being considered for being made a rule of the court. Since this course of action is available and has been rightly adopted by the Delhi High Court, we do not feel necessary to examine the hypothetical question as to whether even in absence of any ground for setting aside such an award, could the court concerned refuse to make the award a rule of the court under Section 17 of the Act if it was confronted with a situation like the one on hand in this case. Such a question need not be answered in the present proceeding26. We have already referred to judgments highlighting the significance of family arrangement under Hindu Law and in light of such judgments and considering the scheme of the Act and provisions of Code of Civil Procedure we are satisfied that family arrangements made before the Rajasthan High Court in 1994 before the Company Judge and in 1995 before the Division Bench need to be protected and given pre-eminence over the award which is yet not made the rule of the court. The family arrangement was arrived at in spite of knowing the award for six years and obviously because the parties who are family members, were at loggerheads over the terms of the award. No doubt the family arrangements were initially made only on behalf of three groups who originally signed the agreements for themselves as well as on behalf of their families but the 4th group, i.e., M.K. Sanghi group later decided to go along with that arrangement by opting to withdraw its appeal. Hence we accept the submissions advanced by Mr. Datar, Mr. Pachnanda and Mr. Shyam Divan and hold that if parties settle their disputes amicably by an agreement, even post-award, such settlement/agreement will prevail in view of requirement of the Act that an award will acquire the status of a decree only when it is made a rule of the court after rejection of all objections. In that view of the matter there is no hindrance in law in upholding the family arrangements made before the High Court at Rajasthan as well as judgment of the Bombay High Court which has attained finality. They deserve to have pre-eminence over the award in question27. The act of A.K. Sanghi in not honouring his undertaking to withdraw his petition for making the award a rule of court and the attempt made by Vijay Sanghi to obstruct the scheme of reconstruction-cum-family settlement of 1994 by getting transposed as an appellant in Company Appeal No. 30 of 1994 when his father A.K. Sanghi had signed the settlement on behalf of his group, were impermissible conduct of approbate and reprobate on the part of A.K. Sanghi group which should not have been permitted. The status of the head of the family acting as a Karta under the traditional Hindu law deserves to be kept in mind in such a situation. The junior members of the family are bound by decisions of a Karta in matters of family business and property unless it can be pleaded and proved that the head of the family has acted fraudulently or for immoral purposes. We have not been shown any such case on behalf of Vijay Sanghi. In such a situation, ignoring the traditional Hindu law and the rights of the head of the family or Karta has put unnecessary burden not only on the larger family but also upon the courts28. We have examined the Division Bench judgment of the Rajasthan High Court under challenge by Rajni Sanghi and we find that the remand order is not on the basis of any defect in the agreements or supplementary agreements but on account of certain technical requirements which should have been ignored when the issues had been settled by all the stake holders by reaching amicable agreement. The companies of family of four brothers are almost like partnerships and when all were agreeable, interest of justice was best subserved by recognizing even the supplementary family settlement of 1995 in favour of Rajni Sanghi as well as the original family arrangement of 1994 accepted by the Company Judge. In that view of the matter the order of remand under challenge at the instance of Rajni Sanghi is set aside and both the family arrangements indicated above are affirmed. If any party fails to act as per those arrangements within three months, the aggrieved party will be free to initiate appropriate proceedings including those of contempt before the concerned High Court or seek execution of the agreements through other appropriate proceedings. Civil Appeal No.3687 of 2006 is allowed to the aforesaid extent and is disposed of accordingly.