Case: M/S. CHITRALEKHA BUILDERS &amp; ANR. THROUGH ANIL G. SHAH POWER OF ATTORNEY &amp; HUSBAND OF THE PARTNER Vs. G.I.C. EMPLOYEES SONAL VIHAR CO-OP. HOUSING SOCIETY LTD. &amp; ANR

M/s. Chitralekha Builders was impleaded as Defendant No.1, Kusum Gorule was impleaded as Defendant No.2, and M/s. Oswal Enterprises was impleaded as Defendant No.3. It was prayed that : (a) this Honble Court be pleased to declare that the partnership firm M/s Chitralekha Builders stands dissolved on 15.07.2004 or from such other date as this Honble Court may deem fit and proper; (b) this Honble Court be pleased to order for dissolution and winding up of affairs of the partnership firm M/s Chitralekha Builders under the order and directions of this Honble Court. (c) this Honble Court be pleased to order for taking accounts of the partnership firm M/s Chitralekha Builders from the date of dissolution or from such other date as this Honble Court may deem fit and proper and the shares of the plaintiff and the defendant no. 2 be ascertained and ordered to be paid over. (d) for the purposes aforesaid, necessary directions be given and orders be passed; (e) this Honble Court be pleased to declare that consent decree dated 16.02.2005 passed in suit No. 1335 of 1998 is bad in law, illegal and void and not binding upon the suit property; (f) this Honble Court be pleased to further declare that the consent decree dated 03.10.2005 passed in suit no. 1335 of 1998 is bad in law, illegal and void and not binding upon the suit property; (g) this Honble Court be pleased to declare that the purported conveyance dated 25.07.2005 executed in favour of the defendant no. 3 of the suit property is bad in law, void, inoperative and not enforceable against the suit property. (h) this Honble Court be pleased to pass the decree revoking and cancelling the purported conveyance dated 26.07.2005 executed in favour of the defendant no. 3 in respect of the suit property. (i) Pending the hearing and final disposal of the suit court receiver, High Court, Bombay or any other any fit and proper person be appointed as the receiver in respect of the suit property more particularly described in Schedule annexed to the plaint and marked Exhibit-B with all powers under Order 40 of the Code of Civil Procedure, 1908; (j) pending the hearing and final disposable of the suit the defendants no. 2 and 3, their agents, servants and/or any person acting or claiming through them be restrained by an interim order and injunction of this Honble Court from dealing with, disposing of or creating any third party interest or carrying out development works of any nature whatsoever in the suit property more particularly described in the Scheduled annexed to the plaint and marked Exhibit-B. (k) ad-interim reliefs in terms of prayers (i) and (j) above be granted; (l) Cost of the suit be awarded to the plaintiff; (m) Such other and further reliefs as the nature and circumstances of the case may require be granted. During the course of hearing, we were informed that the Suit No.3162 / 2005 is pending at the stage of recording of evidence. 5. Arbitration proceedings 5.1. The inter se disputes between Appellant No.2-Nina Anil Shah and Respondent No.2-Kusum Gorule led to the invocation of arbitration proceedings. The Bombay Court by Order dated 22.07.2005 appointed Justice A.C. Agarwal, retired Chief Justice of the Madras High Court as the sole arbitrator. 5.2. The sole arbitrator passed an Award on 01.08.2006 holding that the partnership firm-Chitralekha Builders was dissolved on 15.07.2004. The suit property was not an asset of the partnership firm. The Appellant No. 2 was directed to pay Rs.62,18,324 i.e. 50% of the expenses of the partnership firm with interest @ 12 % p.a. 5.3. The appellants filed Objections to set aside the award u/S. 34, which were dismissed by Order dated 03.10.2006. The appellants filed Appeal No. 813 / 2006 u/S. 37 of the 1996 Act, wherein by Order dated 21.07.2014, the division bench of the High Court remanded the application u/S. 34 for fresh consideration. 5.4. A single judge of the High Court by Order dated 05.06.2017 partly allowed the application u/S. 34, and set aside the claim for expenses of the partnership firm. 5.5. The appellant No. 2 filed Appeal No. 266-268 / 2017 under Section 37 of the 1996 Act before the High Court, which is currently pending consideration before the division bench. 6. Proceedings before the Supreme Court The challenge in the present Civil Appeal is limited to the Order dated 22.07.2014 passed by a division bench of the High Court dismissing the appeal being Appeal No. 558 / 2017 filed by the appellants to challenge the 1st Consent Decree dated 16.02.2005. 6.1. This Court by Order dated 19.11.2014 issued Notice only for exploring the possibility of a settlement between the appellants and Respondent No.2-Kusum Gorule (originally Respondent No.55). 6.2. The appellants filed I.A. No. 9 / 2016 to delete the original Respondent Nos. 2 to 54 (members of the Vaity family) from the array of parties. Mr.Anil G.Shah-the husband and Power of Attorney holder of Appellant No.2-Nina Anil Shah appeared before the Chamber Judge of this Court, when I.A. No. 9 / 2016 filed by the said Appellant was allowed vide Order dated 28.11.2016 at the risk of the Appellants. 6.3. On 27.03.2018, the appellants filed I.A. No. 48308 / 2018 to implead Oswal Enterprises as a party to the present proceedings. 6.4. This Court by Order dated 12.12.2019 appointed Mr. Nikhil Nayyar, learned Senior Counsel as Amicus Curiae to assist the Court on behalf of the Appellant. 6.5. On 17.03.2020, the appellants filed I.A. No. 73241 / 2020 to reimplead Respondent Nos. 2 to 54 i.e. members of the Vaity family [who had been deleted vide Order dated 28.11.2016] as parties to the present Civil Appeal. 7. We have heard the learned Amicus Curiae, Mr. Nikhil Nayyar, Senior Advocate, Mr. Jay Savla, Senior Advocate on behalf of the Respondents, and Mr. Anil G. Shah in-person, as the Power of Attorney holder of Appellant No.2. 8. We will first deal with the 2 pending I.As.

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

Explanation:
0[ds]9. Mr. Nikhil Nayyar, learned senior counsel appearing as Amicus Curiae, Mr. Anil G. Shah in-person, as the Power of Attorney Holder of appellant no. 2, and also learned counsel for the respondents have extensively made their submissions on merits. What transpires from the record is that both the consent decrees dated 16.02.2005 and 03.10.2005 have been challenged at the behest of the appellants in the substantive Suit No. 3162 / 2005 filed at their instance, which is pending adjudication before the Bombay High Court.15. The substantive Suit No.1335 / 1988 was originally filed at the instance of Kusum Gorule (i.e. Geetanjali G. Sohani) [original plaintiff no. 2 in Suit No. 1335 / 1988] and the Vaity family and the decree on the consent terms was passed vide Order dated 16.02.2005, and the subsequent consent order dated 03.10.2005, came to be passed between the parties, viz. GIC Employees Sonal Vihar Co-operative Housing Society (original plaintiff no. 1 in Suit No. 1355/1988) and Oswal Enterprises (Defendant No. 57 in Suit No. 1355 / 1988). Undisputedly, Suit No. 1335/1988 had not been examined by the Court on merits, since the parties to the proceedings entered into a compromise, and a consent order came to be passed by the Court vide Order dated 16.02.2005 followed with Order dated 03.10.2005. Consequently, the suit was disposed of on the consent terms arrived between the parties.16. The present appellants were not a party to the proceedings at the stage when the consent order came to be passed on 16.02.2005, or the subsequent order dated 03.10.2005 in Suit No. 1335 / 1988. Both the consent orders dated 16.02.2005 and 03.10.2005 would consequently not have a binding effect on the present Appellants. The consent orders dated 16.02.2005 and 03.10.2005 challenged in the substantive Suit No. 3162 / 2005 would require to be examined by the Court independently on its own merits in accordance with law, without being influenced by the observations made in the impugned judgment dated 22.07.2014.17. The Division Bench of the High Court in the impugned judgment, after taking note of the submissions made, has recorded a finding that since the Appellants were not a party to the proceedings, and the Order dated 16.02.2005 has been passed on the terms agreeable to the parties to the proceedings, it shall not be binding upon the Appellants, and their rights could be examined independently in the substantive suit filed at their instance.18. We are also of the considered view that since the Appellants were not a party to the Consent Terms as is evident from the record, when the Orders came to be passed on 16.02.2005 followed with 03.10.2005, it may not bind the Appellants. Its legal effect is open to be examined in the substantive suit filed at their instance independently on its own merits in accordance with law. We do not find any error having been committed by the High Court, which may call for our interference.The submission is of no substance since in the first instance, Suit No. 1335/1988 was disposed of by the Court on the consent terms arrived between the parties to the proceedings vide Order dated 16.02.2005 followed by Order dated 03.10.2005. In the given circumstances, even though the Appellants who were later impleaded, have a right of appeal under Section 96 of the CPC. However, since the Appellants were not a party to the Consent Orders, it was not open for the Court to examine the legal effect of the Consent Orders dated 16.02.2005 and 03.10.2005 to which the Appellants were not a party. Once the substantive suit has been filed at their instance questioning the Consent Orders dated 16.02.2005 followed by 03.10.2005, the same is indeed open to be examined independently on its own merits in the pending proceedings initiated at their instance.20. So far as the rights of the Appellants are concerned, the same have been duly protected by the High Court in the impugned judgment dated 22.07.2014.