Case: Sohan Lal Gupta(Dead) Thr.Lrs Vs. Smt. Asha Devi Gupta

Two groups of persons - Guptas and another Sharmas - held several properties including three firms, six limited companies, one trust and other movable and immovable assets. Both the groups had 50% shares each. The family members of the Guptas and Sharmas Groups were interested in many or in some of businesses and the firms. The family tree of the Gupta Group is as under:-3. Disputes and differences having arisen between the two groups as also between the family members of the same group, an agreement was entered into on or about 10.4.1975 for referring some of the disputes to the arbitration of one Mr. M.J. Bhide. The material parts of said agreement are asThe parties hereto agree that all disputes differences between the parties or their representatives concerning or relating to or touching the said several firms, companies, assets movable or immovable or any act done by the parties or in regard to their respective rights, duties and obligations of the parties hereto or their enforcement which exist between the parties and also of other disputes and differences that may hereafter arise between the parties and be laid by the parties or either of them before he shall make his award are hereby referred to the Award and final determination of Shri P.J. Bhide alias Purshottam Jagannath Bide, son of Shri J.V. Bhide, residing at No. P-390 Keytolla Lane, Calcutta-29.It is not in dispute that said Shri B.J. Bhide was a Chartered Accountant and a Tax Consultant. He had been dealing with accounts and other matters for and on behalf of the firms and the companies belonging to the parties. The parties indisputably had great faith and confidence in him.6. During the pendency of the arbitration proceedings, certain disputes arose as regards management, wherefor also intervention of the arbitrator was sought for. Several correspondences passed between the arbitrator and the parties with which we are not concerned at this juncture.7. The arbitrator gave two awards, which were as regards (1) division of 50% cumulatively and (2) the said division among the family members of the Guptas.8. Seven members of the Guptas Groups filed objections to the said awards including the Ghanshyamdas Gupta. The said Ghanshyamdas Gupta at the relevant point of time was a resident of Madras. The primary objections raised by the objectors i.e. as regard validity of the awards purported to be (1) violative of Section 108 of the Companies, Act, (2) awards made in favour of different persons including friends, relations and other individuals who were not the parties to the agreement; and (3) that the arbitrator erred in treating all the disputes in a composite award, were rejected.9. The learned Single Judge although did not set aside the said award on the ground of misconduct on the part of the arbitrator but set aside the said award, inter alia, on the ground of procedural irregulatory holding that no reasonable notice was given to the said Ghanshyamdas Gupta. Before the learned Single Judge, a further contention was raised that the arbitrator committed illegality insofar as he sought for a letter from the parties in anticipation that they would accept his award. The learned Single Judge in this behalf was of theIn the background of this case, this conduct of the arbitrator, seeking for such a letter from the parties, in my opinion, makes the award vulnerable.10. The appellants herein carried the matter in appeal before a Division Bench against the judgment. The Division Bench of the High Court upheld the findings of the learned Single Judge that Ghanshyamdas Gupta had not been given a reasonable notice amounting to violation of principles of natural justice. The Division Bench also upheld the second finding of the learned Single Judge holding that the comments of the learned Single Judge were clearly justified.11. On the said findings the appeal was dismissed. Cross objections filed by the respondent were also dismissed. Aggrieved thereby and dissatisfied therewith, the appellants are before

Court's reasoning:
41. Keeping in view the statements made by Ghanshyamdas Gupta in the said interim application, we are of the opinion that at this stage, he cannot be permitted to change his advocate, particularly in view of the fact that he stuck to his earlier stand for several years.Furthermore, in this case Ghanshyamdas Gupta expressly relinquished his right by filing an application stating that he would withdraw his objection. Such relinquishment in a given case can also be inferred from the conduct of the party. The defence which was otherwise available to Ghanshyamdas Gupta would not be available to others who took part in the proceedings. They cannot take benefit of the plea taken by Ghanshyamdas Gupta. Each party complaining violation of natural justice will have to prove the misconduct of the arbitrator tribunal in denial of justice to them. The appellant must show that he was otherwise unable to present his case which would mean that the matters were outside his control and not because of his own failure to take advantage of an opportunity duly accorded to him. [See MinmetalsGermany Gmbh vs. Ferco Steel Ltd. [(1999) 1 All ER (Comm)315]. This Courts decision in Renusagar Power Co. Ltd. vs. General Electric Co. [AIR 1994 SC 860 ] is also a pointer to the said proposition of law.44. Keeping in view the facts and circumstances of this case, we are of the opinion that Ghanshyamdas Gupta cannot be said to have been refused a fair opportunity of participation in the arbitration proceedings.45. So far as the other ground is concerned, which found favour of the High Court, namely, that the arbitrator had asked the parties to issue a letter to him that his award shall not be questioned would render the award a nullity inasmuch the same was not acted upon and in fact no letter was issued. The arbitrator must have done so keeping in view the peculiar nature of the disputes and to see that all the disputes come to an end.