Hari Shankar Singhania & Ors vs Gaur Hari Singhania & Ors

The short facts of the case are as follows:-

On May 8, 1992, a plaint under section 20 of the Arbitration Act, 1940 was filed before the High Court of Judicature at Bombay by the appellants (1-7 ousted group). On September 19, 1992, respondent No.1 herein, Dr. Gaur Hari Singhania group (contesting respondent Nos.1-9) filed an affidavit in opposition stating and submitting that, the suit filed by the appellant in the High Court is barred by limitation and that the High Court had no jurisdiction to entertain the suit and, therefore, the same is liable to be dismissed.

It is pertinent to notice that respondent Nos. 10-20 supported the claim made by the appellants. A learned Single Judge of the Bombay High Court on April 09, 1996 dismissed the Arbitration Suit of the appellants on the ground of limitation being 50 days beyond the period of three years computed from March 18, 1989. An appeal was preferred by appellant Nos. 1-7 and learned Judges of the Division Bench of the Bombay High Court dismissed the appeal on the ground of limitation and that oral prayer for condonation of delay will not be entertained by the Courts.

In the circumstances, appellant No.1 herein and the other members of the branch of Lakshmipat Singhania wanted to take recourse to due process of law for getting distribution and allotment in specie of their one-third share in those 15 immovable properties. Hence, application under Section 20 of the Arbitration Act, 1940 was filed in the High Court of Bombay on 08.05.1992. Other group opposed the application on the ground of limitation and the lack of jurisdiction. Single Judge rejected the plea of the lack of jurisdiction but upheld the plea of limitation on the basis that disputes and differences arose on 18.03.1989 whereas the application was filed on 08.05.1992 i.e. to say 50 days beyond the period of 3 years. The Division Bench also dismissed the appeal filed by the appellant on the ground of limitation.

Therefore, in our opinion, technical considerations should give way to peace and harmony in enforcement of family arrangements or settlements.

Thus we conclude by observing that, the Arbitration suit filed by the appellants is well within time as the dispute is deemed to have arisen only after the last communication between the parties dated 29th September, 1989, whereby, there were efforts made to amicably settle the dispute between the parties. Also as an admitted fact the appellants and respondent Nos. 10 to 20 were at all material times and still are ready and willing to do all the things necessary for the proper conduct of the arbitration including the appointment of Arbitrator. Further it is not fair on the appellants to let this dispute continue, with the assets in question under the control and enjoyment of the contesting respondents 1-9.

The aforesaid disputes are all covered by the arbitration clause and fall within the scope and ambit thereof. The parties are at liberty to file their further pleadings, claims etc. before the sole Arbitrator.

Conclusion: Better late than never We have already referred to the concept of family arrangement and settlement. Parties are members of three different groups and are leading business people. We, therefore, advise the parties instead of litigating in Court they may as well concentrate on their business and, at the same time, settle the disputes amicably which, in our opinion, is essential for maintaining peace and harmony in the family. Even though the parties with a good intention have entered into the Deed of Dissolution and to divide the properties in equal measure in 1987, the attitude and conduct of the parties have changed, unfortunately in a different direction. Therefore, it is the duty of the Court that such an arrangement and the terms thereof should be given effect to in letter and spirit. The appellants and the respondents are the members of the family descending from a common ancestor. At least now, they must sink their disputes and differences, settle and resolve their conflicting claims once and for all in order to buy peace of mind and bring about complete harmony and goodwill in the family.

For the foregoing reasons, we allow this appeal and set aside the orders passed by the learned Single Judge and as affirmed by the Division Bench in Appeal No. 440/1996 in arbitration Suit No.1904/1992 dated 09.06.2004. Parties are directed to bear their own costs.

We direct all the parties to appear before the Arbitrator on 03.05.2006. The interim order passed by the High Court shall be honoured by all the parties till the disposal of the matter by the Arbitrator. Parties are at liberty to take further orders from the Arbitrator.