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Wednesday, September 30, 2015

Merely due to the assignment or release of the rights during the pendency of the appeal, the appellant did not in any manner lose the right to continue the appeal. Merely by transfer of the property during the pendency of the suit or the appeal, plaintiff or appellant, as the case may be, ordinarily has a right to continue the appeal. It is at the option of the assignee to move an application for impleadment. = Or. 22 of C.P.C = In order to appreciate the points involved, it would be necessary to refer to the provisions of Order 22 of the Code, Rules 3 and 4 whereof prescribe procedure in case of devolution of interest on the death of a party to a suit. Under these Rules, if a party dies and right to sue survives, the court on an application made in that behalf is required to substitute legal representatives of the deceased party for proceeding with a suit but if such an application is not filed within the time prescribed by law, the suit shall abate so far as the deceased party is concerned. Rule 7 deals with the case of creation of an interest in a husband on marriage and Rule 8 deals with the case of assignment on the insolvency of a plaintiff. Rule 10 provides for cases of assignment, creation and devolution of interest during the pendency of a suit other than those referred to in the foregoing Rules and is based on the principle that the trial of a suit cannot be brought to an end merely because the interest of a party in the subject-matter of the suit has devolved upon another during its pendency but such a suit may be continued with the leave of the court by or against the person upon whom such interest has devolved. But, if no such step is taken, the suit may be continued with the original party and the person upon whom the interest has devolved will be bound by and can have the benefit of the decree, as the case may be, unless it is shown in a properly constituted proceeding that the original party being no longer interested in the proceeding did not vigorously prosecute or colluded with the adversary resulting in decision adverse to the party upon whom the interest had devolved. The legislature while enacting Rules 3, 4 and 10 has made a clear-cut distinction. In cases covered by Rules 3 and 4, if right to sue survives and no application for bringing the legal representatives of a deceased party is filed within the time prescribed, there is automatic abatement of the suit and procedure has been prescribed for setting aside abatement under Rule 9 on the grounds postulated therein. In cases covered by Rule 10, the legislature has not prescribed any such procedure in the event of failure to apply for leave of the court to continue the proceeding by or against the person upon whom interest has devolved during the pendency of a suit which shows that the legislature was conscious of this eventuality and yet has not prescribed that failure would entail dismissal of the suit as it was intended that the proceeding would continue by or against the original party although he ceased to have any interest in the subject of dispute in the event of failure to apply for leave to continue by or against the person upon whom the interest has devolved for bringing him on the record.=ORDER XXII, RULES 10 AND 11. “10. Procedure in case of assignment before final order in suit.- (1) In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved. (2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit of sub-rule (1). Under Rule 10 Order 22 of the Code, when there has been a devolution of interest during the pendency of a suit, the suit may, by leave of the court, be continued by or against persons upon whom such interest has devolved and this entitles the person who has acquired an interest in the subject-matter of the litigation by an assignment or creation or devolution of interest pendente lite or suitor or any other person interested, to apply to the court for leave to continue the suit. But it does not follow that it is obligatory upon them to do so. If a party does not ask for leave, he takes the obvious risk that the suit may not be properly conducted by the plaintiff on record, and yet, as pointed out by Their Lordships of the Judicial Committee in Moti Lal v. Karrabuldin [ILR (1898) 25 Cal. 179] he will be bound by the result of the litigation even though he is not represented at the hearing unless it is shown that the litigation was not properly conducted by the original party or he colluded with the adversary. It is also plain that if the person who has acquired an interest by devolution, obtains leave to carry on the suit, the suit in his hands is not a new suit, for, as Lord Kingsdown of the Judicial Committee said ina cause of action is not prolonged by mere transfer of the title. It is the old suit carried on at his instance and he is bound by all proceedings up to the stage when he obtains leave to carry on the proceedings.This Court in Jaskirat Datwani v. Vidyavati & Ors. [2002 (5) SCC 647], while relying upon Dhurandhar Prasad (supra), has laid down that even if no step is taken by assignee, suit may be continued by the original party and the person upon whom the interest has devolved will be bound by the decree, particularly when such party had the knowledge of the proceedings. Ordinarily, the person is bound by the decree until and unless it is shown that the decree was based upon fraud or collusion etc. Resultantly, we are of the opinion that the High Court has gravely erred in law in dismissing the appeal on the aforesaid ground. Thus, its judgment and order being unsustainable, are hereby set aside. We remit the appeal to the High Court for deciding the same afresh in accordance with law after hearing the parties. The appeal is allowed. No order as to costs.

                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.7889  OF 2015
                (Arising out of S.L.P. [C] No.36889 of 2013)


Sharadamma                              … Appellant


Vs.



Mohammed Pyrejan (D) through LRs. & Anr.     … Respondents



                               J U D G M E N T



ARUN MISHRA, J.



1.    Heard learned counsel for the parties.

2.    Leave granted.

3.    This is an appeal against  the  judgment  and  order  dated  24.9.2013
passed by the High Court of Karnataka at Bangalore in Regular  First  Appeal
No.1735 of 2011, dismissing the appeal filed by the  plaintiff-appellant  on
the ground that she had released  her  interest  in  the  suit  property  in
favour of her daughter Smt. Padmavathi on 11.4.2011 and said Padmavathi,  in
turn, had transferred the property in favour of Mr. G.R.  Ramesh  vide  sale
deed dated 20.4.2011. Consequently, she had lost her right to  continue  the
appeal preferred as against dismissal of the suit vide  judgment  and  order
dated 16.6.1990.

4.    The facts, in brief,  indicate  that  Sharadamma,  plaintiff-appellant
had filed Original Suit No.6020 of 1998 on  5.8.1998  for  the  purposes  of
declaration of title and for restoration of possession on  the  strength  of
registered sale deed dated 10.11.1965. The plaintiff had also claimed a  sum
of Rs.3,000/- towards past damages and a further sum of Rs.20/- per  day  as
continuing damages. The suit was dismissed by the trial court against  which
the plaintiff had preferred regular first appeal before the High Court.  The
same has been dismissed on the aforesaid ground  by  the  impugned  judgment
and order.

5.    We have heard learned counsel for  the  parties  and  opine  that  the
impugned judgment is patently illegal.  Merely  due  to  the  assignment  or
release of the rights during the pendency of the appeal, the  appellant  did
not in any manner lose the right to continue the appeal. Merely by  transfer
of the property during the pendency of the suit or the appeal, plaintiff  or
appellant, as the case may be,  ordinarily  has  a  right  to  continue  the
appeal. It is at the option of the  assignee  to  move  an  application  for
impleadment. Considering the provisions contained in Order 22  Rule  10  and
Order 22 Rule 11 of the Code of Civil Procedure, the impugned  judgment  and
order of the High Court cannot be allowed to be sustained. Order 22 Rule  10
and Order 22 Rule 11CPC are extracted hereunder :

ORDER XXII, RULES 10 AND 11.
“10. Procedure in case of assignment before final  order  in  suit.- (1)  In
other cases of an assignment, creation or devolution of any interest  during
the pendency of a suit, the suit may, by leave of the  Court,  be  continued
by or against the  person  to  or  upon  whom  such  interest  has  come  or
devolved.

(2) The attachment of a decree pending an appeal therefrom shall  be  deemed
to be an interest entitling the person who procured such attachment  to  the
benefit of sub-rule (1).

                                  x x x x x

11. Application of Order to appeals.- In the application of  this  Order  to
appeals, so far as may be, the word “plaintiff” shall be held to include  an
appellant, the word  “defendant”  a  respondent,  and  the  word  “suit”  an
appeal.”



6.    A bare reading of the provisions of Order XXII Rule 10 makes it  clear
that the legislature has not envisaged the penalty of dismissal of the  suit
or appeal on account of failure of the assignee to move an  application  for
impleadment  and  to  continue  the  proceedings.  Thus,  there  cannot   be
dismissal of the suit or appeal, as the case may be, on account  of  failure
of assignee to file an application to continue the proceedings. It would  be
open to the assignor to continue the proceedings  notwithstanding  the  fact
that he ceased to have any interest in the  subject-matter  of  dispute.  He
can continue the proceedings for the benefit of assignee.  The  question  is
no more res integra. This Court in Dhurandhar Prasad Singh  v.  Jai  Prakash
University & Ors. [2001 (6) SCC 534] has laid down thus :



“6. In order to appreciate the points involved, it  would  be  necessary  to
refer to the provisions of Order 22 of the  Code,  Rules  3  and  4  whereof
prescribe procedure in case of devolution of interest  on  the  death  of  a
party to a suit. Under these Rules,  if  a  party  dies  and  right  to  sue
survives, the court on an application made in that  behalf  is  required  to
substitute legal representatives of the deceased party for  proceeding  with
a suit but if such an application is not filed within  the  time  prescribed
by law, the suit shall abate so far as  the  deceased  party  is  concerned.
Rule 7 deals with the case of creation  of  an  interest  in  a  husband  on
marriage and Rule 8 deals with the case of assignment on the  insolvency  of
a plaintiff.  Rule  10  provides  for  cases  of  assignment,  creation  and
devolution of interest during the  pendency  of  a  suit  other  than  those
referred to in the foregoing Rules and is based on the  principle  that  the
trial of a suit cannot be brought to an end merely because the  interest  of
a party in the subject-matter of the suit has devolved upon  another  during
its pendency but such a suit may be continued with the leave  of  the  court
by or against the person upon whom such interest has devolved.  But,  if  no
such step is taken, the suit may be continued with the  original  party  and
the person upon whom the interest has devolved will  be  bound  by  and  can
have the benefit of the decree, as the case may be, unless it is shown in  a
properly constituted proceeding that the  original  party  being  no  longer
interested in the proceeding did not vigorously prosecute or  colluded  with
the adversary resulting in decision adverse  to  the  party  upon  whom  the
interest had devolved. The legislature while enacting Rules 3, 4 and 10  has
made a clear-cut distinction. In cases covered by Rules 3 and  4,  if  right
to sue survives and no application for bringing  the  legal  representatives
of a deceased party is filed within the time prescribed, there is  automatic
abatement of the suit and procedure has been prescribed  for  setting  aside
abatement under Rule 9 on the grounds postulated therein. In  cases  covered
by Rule 10, the legislature has not prescribed any  such  procedure  in  the
event of failure to apply for leave of the court to continue the  proceeding
by or against  the  person  upon  whom  interest  has  devolved  during  the
pendency of a suit which shows that the legislature was  conscious  of  this
eventuality and yet has not prescribed that failure would  entail  dismissal
of the suit as it was intended that the  proceeding  would  continue  by  or
against the original party although he ceased to have any  interest  in  the
subject of dispute in the event of failure to apply for  leave  to  continue
by or against the person upon whom the interest has  devolved  for  bringing
him on the record.



7. Under Rule 10 Order 22 of the Code, when there has been a  devolution  of
interest during the pendency of a suit,  the  suit  may,  by  leave  of  the
court, be continued by or  against  persons  upon  whom  such  interest  has
devolved and this entitles the person who has acquired an  interest  in  the
subject-matter of the litigation by an assignment or creation or  devolution
of interest pendente lite or suitor  or  any  other  person  interested,  to
apply to the court for leave to continue the suit. But it  does  not  follow
that it is obligatory upon them to do so.  If  a  party  does  not  ask  for
leave, he takes  the  obvious  risk  that  the  suit  may  not  be  properly
conducted by the plaintiff on record, and  yet,  as  pointed  out  by  Their
Lordships of the Judicial Committee in Moti Lal v. Karrabuldin  [ILR  (1898)
25 Cal. 179] he will be bound by the result of the  litigation  even  though
he is not represented at the hearing unless it is shown that the  litigation
was not properly conducted by the original party or  he  colluded  with  the
adversary. It is also plain that if the person who has acquired an  interest
by devolution, obtains leave to carry on the suit, the suit in his hands  is
not a new suit, for, as Lord Kingsdown of the  Judicial  Committee  said  in
Prannath Roy Chowdry v. Rookea Begum [(1857-60)  7  MIA  323],  a  cause  of
action is not prolonged by mere transfer of the title. It is  the  old  suit
carried on at his instance and he is bound by  all  proceedings  up  to  the
stage when he obtains leave to carry on the proceedings.

                                  x x x x x

26. The plain language of Rule 10 referred to above does  not  suggest  that
leave can be sought  by  that  person  alone  upon  whom  the  interest  has
devolved. It simply says that the suit may be continued by the  person  upon
whom such an interest has devolved and this applies  in  a  case  where  the
interest of the plaintiff has devolved. Likewise, in a case  where  interest
of the defendant has devolved, the suit may  be  continued  against  such  a
person upon whom interest has  devolved,  but  in  either  eventuality,  for
continuance of the suit against the  persons  upon  whom  the  interest  has
devolved during the pendency of the suit, leave  of  the  court  has  to  be
obtained. If it is laid down that leave  can  be  obtained  by  that  person
alone upon whom interest of a party to the  suit  has  devolved  during  its
pendency, then there may be preposterous results as such a party  might  not
be knowing about the litigation and consequently not  feasible  for  him  to
apply for leave and if a duty is cast upon him then in such  an  eventuality
he would be bound by the decree even  in  cases  of  failure  to  apply  for
leave. As a rule of prudence, initial duty lies upon the plaintiff to  apply
for leave in case the factum of devolution was within his knowledge or  with
due diligence could have been  known  by  him.  The  person  upon  whom  the
interest has devolved may also apply for such a leave so that  his  interest
may be properly represented as the original party, if it ceased to  have  an
interest in the  subject-matter  of  dispute  by  virtue  of  devolution  of
interest upon another person, may not take  interest  therein,  in  ordinary
course, which is but natural, or by colluding with the other  side.  If  the
submission of Shri Mishra is  accepted,  a  party  upon  whom  interest  has
devolved, upon his failure to  apply  for  leave,  would  be  deprived  from
challenging correctness of the decree by filing a properly constituted  suit
on the ground that the original party having lost interest  in  the  subject
of dispute, did not properly prosecute  or  defend  the  litigation  or,  in
doing so, colluded with the adversary. Any other party,  in  our  view,  may
also seek leave as, for example,  where  the  plaintiff  filed  a  suit  for
partition and during its pendency he gifted away his undivided  interest  in
the Mitakshara coparcenary in favour of the contesting  defendant,  in  that
event the contesting defendant  upon  whom  the  interest  of  the  original
plaintiff has devolved has no cause of action to prosecute the suit, but  if
there is any other co-sharer who is supporting the plaintiff, he may have  a
cause of action to continue with the suit by getting himself  transposed  to
the category of plaintiff as it is well settled that  in  a  partition  suit
every defendant is a plaintiff, provided he has cause of action for  seeking
partition. Thus, we do not find any substance in this submission of  learned
counsel appearing on behalf of the appellant and hold that prayer for  leave
can be made not only by the person upon  whom  interest  has  devolved,  but
also by the plaintiff or any other party or person interested.”

                                                   (emphasis supplied)


7.    This Court in Jaskirat Datwani v.  Vidyavati  &  Ors.  [2002  (5)  SCC
647], while relying upon Dhurandhar Prasad (supra), has laid down that  even
if no step is taken by assignee, suit  may  be  continued  by  the  original
party and the person upon whom the interest has devolved will  be  bound  by
the  decree,  particularly  when  such  party  had  the  knowledge  of   the
proceedings. Ordinarily, the person is bound by the decree until and  unless
it is shown that the decree was based upon fraud or collusion etc.

8.    Resultantly, we are of the opinion that the  High  Court  has  gravely
erred in law in dismissing the appeal on the  aforesaid  ground.  Thus,  its
judgment and order being unsustainable, are hereby set aside. We  remit  the
appeal to the High Court for deciding the same  afresh  in  accordance  with
law after hearing the parties. The appeal is allowed. No order as to costs.




                                             …………………………J.
                                             (Kurian Joseph)




New Delhi;                                   ………………………..J.
September 23, 2015.                          (Arun Mishra)

whether there is any real dispute between the parties about the entitlement of DR Group to have the shares transferred in their favour and whether the exercise of jurisdiction by the High Court is beyond the scope of Section 111 of the Companies Act.-“whether the application is not maintainable on account of its involving complicated questions of title” it is not necessary to decide the other issues raised in the case. ………” scope of power under Section 111 of the Companies Act, 1956, to direct rectification in the share register of a company = The DR Group followed the due procedure. It had the succession certificate in its favour apart from the transfer deed from GD, who admittedly inherited rights from LMJS. Will in favour of GD is beyond any dispute. Thus, the DR Group derived rights from the GD by documents executed by her in her lifetime and conveyed to the Company. Even if the Will of GD is not taken into account, for purposes of issue of rectification, the documents executed by GD clearly entitled the DR Group to have the rectification made. The decisions in Mulraj, Manohar Lal, Ajudh Raj and Chiranjilal Shrilal Goenka (supra) are of no relevance to a situation where the beneficiary of the interim order itself opts to proceed with the matter in respect of which stay is granted by higher Court. In the present case, GD having settled the matter and having herself sought rectification, the interim order granted at her instance could be no bar against the DR Group. The decisions sought are thus, of no relevance to such a situation. We sum up our conclusions as follows : (i) LMJS executed will in favour of his mother – GD which is not in dispute; (ii) GD and DR jointly obtained succession certificate; (iii) GD signed the transfer deeds and communicated the same to the Board of Directors; and (iv) The civil court vide order dated 28th July, 1991 declined to grant temporary injunction finding no prima facie case against the succession certificate. 23. In above circumstances, even in summary jurisdiction, the CLB had no justification to reject the claim of the DR Group. The High Court rightly reversed the said order. 24. In view of the above, we find no merit in these appeals. The same are dismissed with costs quantified at Rs.5 lakhs in each of the appeals.

                                 REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO.7914 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.4384 OF 2013)



JAI MAHAL HOTELS PVT. LTD.                  … APPELLANT

                                   VERSUS

RAJKUMAR DEVRAJ & ORS.                     … RESPONDENTS

                                    WITH

                        CIVIL APPEAL NO.7915 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.4903 OF 2013)

                                    WITH

                        CIVIL APPEAL NO.7919 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.13752 OF 2013)

                                    WITH

                        CIVIL APPEAL NO.7916 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.13756 OF 2013)

                                    WITH

                        CIVIL APPEAL NO.7917 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.14309 OF 2013)

                                    WITH

                        CIVIL APPEAL NO.7918 OF 2015
                (ARISING OUT OF SLP (CIVIL) NO.14322 OF 2013)







                    J U D G M E N T


ADARSH KUMAR GOEL, J.



1.    Leave granted.  The question raised in these appeals  relates  to  the
scope of power under Section 111 of  the  Companies  Act,  1956,  to  direct
rectification in the share register of a company.  The question  has  to  be
examined in the context of correctness of the view  taken  in  the  impugned
order passed by the High Court directing rectification at  the  instance  of
Respondent  No.1-Rajkumar  Devraj  and  Respondent  No.2-Rajkumari   Lalitya
Kumari (the “DR Group”), who are the son and daughter respectively  of  late
Maharaja Jagat Singh (“LMJS”) .

2.    LMJS held shares in M/s. Jai Mahal Hotels Pvt.  Ltd.,  M/s.  Ram  Bagh
Palace Hotels Pvt. Ltd., M/s Sawai Madhopur Lodge Pvt. Ltd. and M/s.  S.M.S.
Investment Corporation Pvt. Ltd.  He died on  05th  February,  1997  leaving
behind a Will dated 23rd June, 1996 in favour of  his  mother  Gayatri  Devi
(“GD”).  Succession certificate dated 19th February, 2009 was issued by  the
District Judge, Jaipur jointly in favour of GD and DR  Group.   GD  executed
transfer deed dated 27th April, 2009  in  favour  of  DR  Group.   She  also
executed Will dated 10th May, 2009 in favour of DR Group.  She died on  29th
September, 2009.  Vide letter  dated  15th  July,  2009,  DR  Group  claimed
transmission and transfer  of  shares  in  their  favour  on  the  basis  of
succession certificate dated 19th February, 2009 issued by the District  and
Sessions Judge,  Jaipur  (Civil),  transfer  deed  dated  27th  April,  2009
executed by their grand mother Gayitri Devi (“GD”) along  with  revalidation
of the letter issued by the Registrar of Companies.

3.    The application having not been accepted by the Company, the DR  Group
filed appeals before the Company Law  Board  (“CLB”),  New  Delhi.   Urvashi
Devi, grand daughter of husband of GD from another wife (“UD  Group”)  filed
application for impleadment stating that the succession  certificate  was  a
nullity.  She accepted validity of Will dated 23rd June,  1996  executed  in
favour of GD by LMJS but contested the succession certificate.  It  was  her
further case that DR Group had no right of succession in view of Will  dated
23rd June, 1996 and they were also not heirs of GD as LMJS  was  adopted  in
another family.  Further stand  was  that  since  at  the  instance  of  GD,
proceedings were stayed, succession certificate could not  be  granted  even
at her instance.  Stay granted by the High Court was in a  petition  seeking
consolidation of a probate case and succession certificate.  Section 370  of
Succession Act was also invoked.  It was also submitted that the  settlement
which was the basis of succession certificate was  not  genuine.   Her  Will
dated 10th May, 2009 was also contested.  Urvashi Devi, Prithvi Raj and  Jai
Singh also sought transfer of shares in their favour claiming  as  heirs  of
GD.  It was submitted that GD could not enter into any  settlement  contrary
to the Will dated 23rd June, 1996.  Further contention  was  that  she  died
intestate on 29th September, 2009 and that DG has been disinherited by  LMJS
in his Will dated 23rd June, 1996.
4.    Suit No.32 of 2010 was also filed by the UD Group before the  District
Judge, Jaipur, raising the dispute of succession to the estate of GD.     In
the said suit, CMA No.20 of 2010 was filed under Order XXXIX Rules 1  and  2
CPC, for temporary injunction. The application  was  dismissed  by  detailed
order dated 28th July, 2011.   In  the  said  application,  all  the  issues
raised by the UD Group were examined  prima  facie,  including  validity  of
succession  certificate  dated  19th  February,   2009.     The   Court   on
considering the rival submissions held :
“In such condition seeing the said entire facts and  circumstances  and  the
documents submitted no prima facie case is made out by  the  applicants  for
stopping the implementation of the order dated  19.02.2009  passed  in  S.A.
No.134 of 1998 by the Learned District Judge, Jaipur till  the  disposal  of
the suit.”

5.    The CLB dismissed the appeals filed by the DR Group vide  order  dated
16th March, 2011.  The Board framed following questions for consideration  :


“(i)  Whether order dated 19.02.2009  in  Succession  Case  No.134/98  is  a
nullity?

(ii)  Whether a Will exists?

(iii) Whether the alleged Will dated 23.06.1996 is required to be proved  or
disprove?

(iv)   Whether  the  probate  proceedings  in  Case  No.32/2006   could   be
dismissed/disposed of on the basis  of  a  settlement  between  the  private
parties?

(v)   Whether probate proceedings exist as on date?

(vi)  Whether construction of the Will is required?

(vii) Whether bar of Section 370 of the Indian Succession  Act  operates  in
the facts and circumstances of this case?

(viii)      Whether Sections 373, 381,  383  and  other  provisions  of  the
Indian Succession Act are applicable in the facts and circumstances of  this
case?

(ix)  Whether Late Maharaj Jagat Singh was adopted?

(x)   Who really are the legal representatives for the shares  held  in  the
sole name of the deceased?”

6.    To decide the above questions, following issues were framed :

(i)   Whether these petitions involve disputed and complicated questions  of
law and facts regarding entitlement to the  estate  of  late  Maharaj  Jagat
Singh?

(ii)  If these petitions involve complicated questions  of  law  and  facts,
whether these are maintainable before the CLB?  To be precise,  whether  the
CLB has jurisdiction in this matter or  it  is  ousted  on  account  of  the
competent court i.e. Civil Court having jurisdiction in this matter.

(iii) In case, the CLB exercising its  discretion  proceeds  to  decide  the
entitlement to shareholding attracting the provisions of sub-section (7)  of
Section 111, is the CLB competent to decide whether  the  alleged  Will   is
proved or disproved?  And as well as other questins enumerated  in  para  51
above.

(iv)  Further, can be CLB ignore that in view of the stay order of the  High
Court the order dated 19.02.2009 in  Case  No.134/98  on  which  issuing  of
Succession Certificate is based and Succession Certificate is the basis  for
the petitioners in C.P. Nos.13 to 16 to claim transmission of shares,  is  a
nullity, is it ab initio void in law, is it without jurisdiction,  is  it  a
merely nullity, it is not necessary for anybody who objects to  that  order,
to apply to set it aside, he can only rely on its invalidity when it is  set
up against him, although he has not taken steps to set it aside, such  order
cannot give rise to any right whatever not even to a  right  to  appeal,  it
can give rise to no rights and  impose  no  obligations,  the  same  can  be
ignored as nullity, that is, non-existent in the eye of law and  it  is  not
necessary to set it aside?

(v)   Whether the order dated 19.02.2009 is unenforceable due to the bar  of
Section 370 of the Indian  Succession  Act,  1925  for  granting  Succession
Certificate in the presence of the Will?

(vi)  Can in view of Section 381  of  the  Succession  Act,  the  Succession
Certificate granted jointly in  the  name  of  the  Rajmata  and  two  grand
children be operative after the demise of the Rajmata?

(vii) Can the probate proceedings in case  No.327/06  be  dismissed  on  the
basis of a settlement between private parties?

(viii)      Can probate proceedings decide entitlement?

(ix)  Whether the CLB shall proceed to decide whether in  the  face  of  the
alleged Will disinheriting Devraj & Lalitya, Late Rajmata  can  directly  or
indirectly still make them entitle to  the  estate  of  Late  Maharaj  Jagat
Singh?

(x)   Whether in the presence of the alleged  Will  disinheriting  Devraj  &
Lalitya, the estate of Late  Maharaj  Jagat  Singh  devolve  upon  Rajkumari
Urvashi, Maharaj Prithviraj Singh, Maharaj Jai Singh  and  Maharaja  Bhawani
Singh whose case is based on adoption of Late Maharaj Jagat Singh?

(xi)  Whether the CLB can decide these questions in a  summary  jurisdiction
is the main issue to be considered in this matter?

7.    It was held that the Board could not decide the  complexity  of  facts
and law which had arisen and such questions  could  be  decided  before  the
Civil Court and not before the CLB.  In this view of the matter, the  matter
was not gone into on merits.   The  concluding  part  of  the  order  is  as
follows :
“67.   Having carefully considered the facts of the  present  case  and  the
nature of the allegations  made  by  the  parties  as  mentioned  above  and
applying the ratio of the decisions mentioned above, I am of the  view  that
such disputed and complicated questions of law and facts cannot  be  decided
by the CLB in the summary jurisdiction under Section 111 of the  Act.   Such
questions which are involved in the present case can be decided  before  the
Civil Court on the basis of the oral and  documentary  evidence  adduced  by
the parties in support of their respective cases.  The CLB is not the  forum
to adjudicate on these complicated questions of law and  facts.   The  issue
“whether the application is not maintainable on  account  of  its  involving
complicated questions of title” it is not  necessary  to  decide  the  other
issues raised in the case.  ………”

8.    DR Group moved the High Court  of  Delhi  under  Section  10F  of  the
Companies Act.  UD Group also filed appeals  before  the  High  Court.   The
High Court allowed the appeals of DR Group and dismissed  the  appeal  filed
by the UD Group. The operative part of the order passed by  the  High  Court
is as follows :
“38.   Having considered carefully, the facts of the present  case  and  the
nature of the allegations made by the respondents,  it  is  clear  that  the
alleged  disputes  raised  by  the  respondent  group  in  so  far  as   the
rectification issue is concerned are all illusory.  Admittedly these  shares
were in the name of Jagat Singh  who  had  bequeathed  them  to  his  mother
Maharani Gayatri Devi and she in terms of a settlement  arrived  at  between
her grandchildren followed  by  her  Will  had  bequeathed  the  said  share
holding thereafter in  favour  of  her  grandchildren  i.e.  the  petitioner
group. The respondents who were the cousins of  Jagat  Singh  are  not  even
claiming as legal heirs of Jagat Singh but only in  their  capacity  of  his
legal representatives; these allegations do not in  any  manner  affect  the
title of the shareholding of Jagat Singh. There is  no  involvement  of  any
fraud or forgery. Petition under Section 111 of the Companies Act  was  well
maintainable.

39. The CLB returning a finding opposite has committed an  illegality  which
is liable to be set aside. It is accordingly  set  aside.  The  order  dated
16.3.2011 is set aside; the member register of the  companies  be  rectified
in the name of the petitioner group and the petitioners  i.e.  Dev  Raj  and
Lalitya Kumari be substituted in lieu of Jagat Singh.

40.  As  noted  Supra,  the  appeals  filed  by  the  respondent  group  are
infructuous; they have supported the order of the CLB, their prayer  in  the
appeal that the shares register be rectified in their favour as  necessarily
to be dismissed as even as per their own statement, they  do  not  have  any
document  to  support  their  submission  that  they  are  entitled  to  the
rectification of the member register qua these  shares  of  Jagat  Singh  in
their favour.”

9.    Thus, the High Court held that the succession certificate  dated  19th
February, 2009 issued by the competent court had to be taken  as  conclusive
evidence under Section 381 of the Indian Succession Act.  The plea that  the
succession certificate dated 19th February, 2009 was in  violation  of  stay
order dated 20th August, 2008 was  rejected.   It  was  observed  that  stay
order was passed at the instance of GD herself whose  statement  itself  was
the basis of the order dated 19th February, 2009.  Writ Petition No.7524  of
2008 wherein order dated  20th  August,  2008  was  passed  itself  was  got
disposed of as infructuous on 18th January, 2011  in  view  of  order  dated
19th February, 2009.  UD  Group  was  in  no  manner  connected  with  those
proceedings.  As regards Suit filed by  UD  Group  challenging  order  dated
19th February, 2009, interim  application  for  stay  of  order  dated  19th
February, 2009 was dismissed on 28th July, 2011.  The Court had  refused  to
grant any interim injunction in favour of UD  Group  and  other  plaintiffs.
As regards disinheritance of DR Group in Will dated 23rd June, 1996, it  was
observed that the reason for disinheriting  as  mentioned  therein  was  not
against the DR Group but only against the estranged wife  of  the  testator.
The GD who was the legatee herself bequeathed her rights in  favour  of  the
DR Group by duly signing the transfer deeds and communicating  the  same  to
the Board of Directors.  She also executed Will dated 10th May, 2009.   Mere
fact that the same had been challenged was no bar to the  claim  of  the  DR
Group.

10.   We have heard S/Shri H.P. Rawal, Sanjiv Sen,  learned  senior  counsel
for the Companies, Shri Vikas Singh,  learned  senior  counsel  for  the  UD
Group and Shri C.A. Sundaram, learned senior counsel for the  DR  Group  and
perused the records.

11.    Contention  raised  on  behalf  of  the  appellants  mainly  is  that
jurisdiction under Section 111 of the Companies Act  is  summary  in  nature
and complicated questions of title cannot be adjudicated upon  in  the  said
jurisdiction.  Reliance has also been placed on Ammonia Supplies Corpn.  (P)
Ltd. vs. Modern Plastic Containers (P) Ltd.[1], Standard Chartered Bank  vs.
Andhra Bank Financial  Services  Ltd.[2],  Luxmi  Tea  Company  Limited  vs.
Pradip Kumar Sarkar[3] and Bajaj Auto Ltd. vs.  N.K.  Firodia[4].    Further
submission is that succession certificate was void  on  account  of  interim
order passed by the High Court dated 20th August, 2008.  Reliance  has  been
placed  on  Mulraj  vs.  Murti  Raghonathji  Maharaj[5],  Manohar  Lal   vs.
Ugrasen[6], Ajudh Raj vs. Moti[7] and Chiranjila Shrilal Goenka  vs.  Jasjit
Singh[8].

12.   It was also submitted that DR Group could not inherit  the  rights  of
LMJS in view of the language of the Will dated 23rd June, 1996 and  also  on
the ground that the Will executed by GD was under challenge.  In absence  of
the said Will, DR Group could  not  acquire  any  rights  as  UD  Group  was
entitled to inherit the estate of GD.

13.   Per contra, Shri Sundaram supported the view taken by the High  Court.
  His  submission  is  that  there  is  no  real  dispute.   The  succession
certificate in favour of DR Group has to be acted upon  especially  when  in
the suit filed by the UD Group, interim order has been declined and  it  has
been found that there was no prima facie  case  in  challenge  to  the  said
certificate.  Pendency of suit without there  being  any  interim  order  in
favour of the UD Group in respect of succession to the estate of the GD  was
of no consequence. The scope of power under Section 111(7) of the  Companies
Act included  jurisdiction  to  decide  a  question  of  title.  Apart  from
succession certificate and the Will,  GD  had  executed  transfer  deed  and
communicated the same to the  Board  of  Directors.   In  the  face  of  her
statement in proceedings for succession  certificate  followed  by  transfer
deed, no dispute whatsoever, remained as to the rights of DR Group  to  have
the shares  transferred  in  their  favour.   The  Board  of  Directors  was
dominated by the UD Group who abused its position to  deprive  DR  Group  of
their rights.  The CLB failed to appreciate the scope  of  its  jurisdiction
as well as the scope of controversy between the  parties.   The  High  Court
rightly allowed their appeal.  Apart  from  relying  upon  the  judgment  in
Ammonia (supra), reliance was also  placed  on  judgment  of  Calcutta  High
Court by Ruma Pal, J. (as she then was) in Nupur  Mitra  vs.  Basubani  Pvt.
Ltd.[9].

14.   We have given due consideration to the rival  submissions.   The  main
question for consideration is whether there is any real dispute between  the
parties about the entitlement of DR Group to have the shares transferred  in
their favour and whether the exercise of jurisdiction by the High  Court  is
beyond the scope of Section 111 of the Companies Act.

15.   We are of the opinion that  there  is  no  real  dispute  between  the
parties as held by the High Court.  DR Group has  furnished  the  succession
certificate as well as the transfer deed executed by  GD  in  their  favour.
The same had to be acted  upon.    Moreover,  the  civil  court  in  interim
application moved by the UD Group held that the UD Group had no prima  facie
case.  The said order was required to be acted upon subject to  any  further
order that may be passed in any pending  proceedings  between  the  parties.
There is no conflicting order of any court or authority.  There is thus,  no
complicated question of title.  Moreover, there is no  bar  to  adjudication
for purposes of transfer of shares unless the court  finds  otherwise.   The
stay order obtained by  GD  herself  could  not  debar  her  from  making  a
statement  to  settle  the  matter.    The  judgments  relied  upon  by  the
appellants have no application to such a fact situation.

16.   In Ammonia (supra), the scope of jurisdiction of the Company Court  to
deal with an issue of rectification in the Register  of  Members  maintained
by the Company was considered.  Following Public Passenger Service Ltd.  vs.
M.A. Khadar[10], it  was  held  that  jurisdiction  under  Section  155  was
summary in nature.  If for reasons of complexity or  otherwise,  the  matter
could be more conveniently decided in a suit, the  Court  may  relegate  the
parties to such remedy.  Subject to the  said  limitation,  jurisdiction  to
deal with such matter  is  exclusively  with  the  Company  Court.   It  was
observed :

“31. ……..It cannot be doubted that in spite of exclusiveness to  decide  all
matters pertaining to the rectification it has to act within the  said  four
corners and adjudication of such matters cannot be doubted to be summary  in
nature. So, whenever a question is raised the court  has  to  adjudicate  on
the facts and circumstances of each case. If it truly is rectification,  all
matters raised in that connection should  be  decided  by  the  court  under
Section 155 and if it finds adjudication of any  matter  not  falling  under
it, it may direct a party to get his right adjudicated  by  a  civil  court.
Unless jurisdiction is expressly or implicitly barred under a  statute,  for
violation  or  redress  of  any  such  right  the  civil  court  would  have
jurisdiction. ……..”


17.   Thus, there is a thin line in appreciating the scope  of  jurisdiction
of the Company Court/Company Law Board.  The jurisdiction  is  exclusive  if
the matter truly relates to rectification but  if  the  issue  is  alien  to
rectification, such matter may not be within the exclusive  jurisdiction  of
the Company Court/Company Law Board.

18.   In Standard Chartered  Bank  (supra),  scope  of  Section  111(7)  was
considered.  It was observed that jurisdiction being summary  in  nature,  a
seriously disputed question of title could be left  to  be  decided  by  the
civil court.  It was observed :

“29 ……The nature of proceedings under Section  111  are  slightly  different
from a title suit, although, sub-section (7) of Section  111  gives  to  the
Tribunal the jurisdiction to decide any question relating to  the  title  of
any person who is a party to the application, to have his  name  entered  in
or omitted from the register and also the  general  jurisdiction  to  decide
any question which it is necessary or  expedient  to  decide  in  connection
with such an application. It has been held in Ammonia  Supplies  Corpn.  (P)
Ltd. v. Modern Plastic Containers (P) Ltd. that the  jurisdiction  exercised
by  the  Company  Court  under  Section  155  of  the  Companies  Act,  1956
(corresponding to Section 111 of the present Act, before  its  amendment  by
Act 31 of 1988) was somewhat summary in  nature  and  that  if  a  seriously
disputed question of title arose, the  Company  Court  should  relegate  the
parties to a suit, which was the more appropriate remedy  for  investigation
and adjudication of such seriously disputed question of title.”



19.   In Luxmi Tea Company Limited and  Bajaj  Auto  Ltd.  (supra),  it  was
observed that a company did  not  have  any  discretion  in  rectifying  its
register except to require the procedure being followed.

20.   In the present case, as already observed, there  is  no  real  dispute
between the parties.  The DR Group followed the due procedure.  It  had  the
succession certificate in its favour apart from the transfer deed  from  GD,
who admittedly inherited rights from LMJS.  Will in favour of GD  is  beyond
any dispute.  Thus, the DR Group derived rights from  the  GD  by  documents
executed by her in her lifetime and conveyed to the Company.   Even  if  the
Will  of  GD  is  not  taken  into  account,  for  purposes  of   issue   of
rectification, the documents executed by GD clearly entitled  the  DR  Group
to have the rectification made.

21.   The decisions in  Mulraj,  Manohar  Lal,  Ajudh  Raj  and  Chiranjilal
Shrilal Goenka (supra)  are  of  no  relevance  to  a  situation  where  the
beneficiary of the interim order itself opts to proceed with the  matter  in
respect of which stay is granted by higher Court.  In the present  case,  GD
having settled the matter  and  having  herself  sought  rectification,  the
interim order granted at her instance could be no bar against the DR  Group.
 The decisions sought are thus, of no relevance to such a situation.

22.   We sum up our conclusions as follows :

(i)   LMJS executed will in favour of his  mother  –  GD  which  is  not  in
dispute;

(ii)  GD and DR jointly obtained succession certificate;

(iii) GD signed the transfer deeds and communicated the same  to  the  Board
of Directors; and

(iv)  The civil court vide order dated 28th July,  1991  declined  to  grant
temporary injunction finding no prima  facie  case  against  the  succession
certificate.

23.   In above circumstances, even in summary jurisdiction, the CLB  had  no
justification to reject the claim of the DR Group.  The High  Court  rightly
reversed the said order.

24.   In view of the above, we find no merit in  these  appeals.   The  same
are dismissed with costs quantified at Rs.5 lakhs in each of the appeals.


                                                    …………..……..…………………………….J.
                                                              [ANIL R. DAVE]


                                                    …………..….………………………………..J.
                                                         [ADARSH KUMAR GOEL]
NEW DELHI
SEPTEMBER 23, 2015
-----------------------
[1]    1998 (7) SCC 105
[2]    2006 (6) SCC 94
[3]    1989 Supp. (2) SCC 656
[4]    1970 (2) SCC 550, 557
[5]    (1967) 3 SCR 84
[6]    2010 (11) SCC 557
[7]    1991 (3) SCC 136
[8]    1993 (2) SCC 507
[9]    1999 (2) Calcutta Law Times 264
[10]   AIR 1966 SC 489

It is pertinent to note here that initially there were two exits in the balcony portion of the cinema theatre. One portion was open as an exit, whereas another had been closed down on account of certain additional seats placed near the exit. The additional seats were arranged with permission of all authorities concerned and even the second exit had also been closed with permission of all authorities concerned. The representatives of the departments concerned like Home Department, Police Department, Fire Department, etc. had visited the theatre before giving necessary permission for increase in the number of seats, approval of the changed layout of seats and for closure of the second exit.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

                       CRIMINAL APPEAL NO.597 OF 2010



SUSHIL ANSAL                                  .....APPELLANT



                                VERSUS

STATE THROUGH CBI                      …..RESPONDENT

                                WITH

                       CRIMINAL APPEAL NO.598 OF 2010




GOPAL ANSAL                                .....APPELLANT



                                VERSUS

STATE THROUGH CBI                      …..RESPONDENT



    WITH

                       CRIMINAL APPEAL NO.599 OF 2010




HARSARUP PANWAR                        ……APPELLANT



                                VERSUS

STATE THROUGH CBI                      …..RESPONDENT



                               WITH

                    CRIMINAL APPEAL NOs.600-602 OF 2010,
                  605 OF 2010, 606 OF 2010 AND 613 OF 2010





                              1 J U D G M E N T




1 ANIL R. DAVE, J.



CRIMINAL APPEAL NOS.597 AND 598 OF 2010



1.    The aforestated appeals  had  been  initially  heard  by  two  Hon’ble
Judges of this Court.  Though the order of conviction  had  been  upheld  by
the learned Judges, on the subject of sentence the learned Judges  differed.
 Justice T.S. Thakur passed the following order on the sentence:

“(i)  Criminal Appeal Nos.597 of 2010 and 598 of 2010 filed by Sushil  Ansal
(A-1) and Gopal Ansal (A-2) respectively are hereby dismissed upholding  the
conviction and sentences awarded to them.”


Whereas Justice Gyan Sudha Mishra passed the following order:

“44.  Therefore, for the reasons recorded hereinbefore, I  am  of  the  view
that in lieu of the enhanced sentence of a period of one year which I  allow
in the appeals preferred by AVUT and CBI, the same  be  substituted  with  a
fine of Rs 100 crores (one hundred crores) to be  shared  and  paid  by  A-1
Sushil Ansal and A-2 Gopal Ansal in equal measure i.e.  Rs  50  crores  each
and Rs 100 crores in all, and shall be paid by way of a demand draft  issued
in the name of the Secretary General of the Supreme  Court  of  India  which
shall be kept in a fixed deposit in  any  nationalised  bank  and  shall  be
spent on the construction of a trauma centre to be built in  the  memory  of
Uphaar Victims at any suitable place at  Dwarka  in  New  Delhi  as  we  are
informed that Dwarka is  an  accident-prone  area  but  does  not  have  any
governmental infrastructure or public health care centre to  treat  accident
victims. For this purpose, the State  of  Delhi,  as  DVB  which  is/was  an
instrumentality of the State, shall allot at least five  acres  of  land  or
more at any suitable location at Dwarka within a period of  four  months  of
this judgment and order on which a trauma centre for accident victims  along
with  a  Super  speciality  department/ward  for  burn  injuries  shall   be
constructed to be known as the “Victims of Uphaar  Memorial  Trauma  Centre”
or  any  other  name  that  may  be  suggested   by   AVUT/Uphaar   Victims’
Association. This trauma centre shall be treated as an extension  centre  of
the Safdarjung Hospital, New Delhi which is close to Uphaar Theatre and  was
the accident site which is hard-pressed  for  space  and  desperately  needs
expansion considering the enormous number  of  patients  who  go  there  for
treatment. The trauma centre to be built at Dwarka shall be  treated  as  an
extension centre of  the  Safdarjung  Hospital  to  be  constructed  by  the
respondent-accused Sushil Ansal and  respondent-accused  Gopal  Ansal  under
the supervision of the Building Committee  to  be  constituted  which  shall
include Secretary General of the Supreme Court, Registrar Administration  of
the Supreme Court along with a  representative  of  AVUT  nominated  by  the
Association and the Hospital Superintendent, Safdarjung Hospital, New  Delhi
within a period of two years from the date of allotment of the plot of  land
by  the  State  of  Delhi  which  shall  be  run  and  administered  by  the
authorities of the  Safdarjung  Hospital  Administration  as  its  extension
centre for accident victims.”

2.    In view of the difference of opinion between the  two  learned  judges
regarding quantum of sentence, the matter  has  been  placed  before  us  in
pursuance of the following order dated 5.03.2014 :-
“4. Criminal Appeals No. 597, 598 and 599 of 2010 filed  by  the  appellants
in those appeals and Criminal Appeals No. 605, 606 and 613 of 2010 filed  by
the State and Criminal Appeals No. 600-602 of 2010 filed by the  Association
of Victims of Uphaar Tragedy to the extent  the  said  appeals  involve  the
question of quantum of sentence to be awarded to  the  convicted  appellants
in the appeals  mentioned  above  shall  stand  referred  to  a  three-Judge
Bench”.

3.    We have heard the learned counsel appearing for the parties  and  have
also carefully gone through  that  portion  of  the  judgment,  whereby  the
sentence has been imposed upon the Appellants.

4.    Upon hearing  the  learned  counsel  and  on  perusal  of  the  record
pertaining to the case, we find that the root cause of  the  fire  was  1000
KVA transformer installed and maintained by the Delhi  Vidyut  Board  (DVB),
which was in the premises of Uphaar Cinema. The said 1000  KVA  transformer,
even though located within the Uphaar cinema premises,  did  not  belong  to
the appellants.

5.    The said  transformer  caught  fire  on  13.6.1997  around  6.55  a.m.
damaging the area surrounding the transformer.  The fire was  brought  under
control by 7.25 a.m. and it was repaired by two employees of the  DVB  along
with Senior Fitter, Bir Singh, who were possibly  not  highly  qualified  in
the field of Electrical Engineering.  The repairs were carried  out  without
use of any  special  equipment.  The  said  transformer  was  recharged  for
resumption of electric supply by 11.30 a.m. on the same day.


6.    As the factual matrix  would  further  unfurl,  on  the  fateful  day,
around 3:00pm, the matinee show of film ‘Border’ started. Between  3:55  and
4:55 p.m., there was a general power shut  down;  however  the  Cinema  show
continued. Immediately, on resumption of electricity at 4:55 pm,  there  was
intense and heavy sparking in the DVB transformer,  which  led  to  B  phase
cable detaching, sliding down of the B  phase  cable,  forming  an  arc  and
ultimately resulting in rupture of the Transformer fin. Through  this  slit,
the transformer oil spilled out, caught fire  and  consequently  set  ablaze
several vehicles parked nearby in the stilt floor. This fire  generated  hot
thick black  smoke,  which  travelled  upwards,  accelerated  by  a  Chimney
effect.

7.  The smoke entered the hall from the staircases, air  conditioning  ducts
as well as the area beneath the screen  and  the  audience  sitting  in  the
ground floor of the auditorium escaped immediately.   The  audience  sitting
in the balcony found it hard to escape as there were no lights due  to  lack
of power supply, nor were there any  emergency  lights  or  lights  to  give
indication about the exit.  Moreover, there were no warnings through  public
address system for immediate evacuation in an orderly  manner.  The  closure
of the right side exit,  elimination  of  one  exit  and  the  narrowing  of
another exit as well as introduction of certain seats  near  the  left  side
exit, together with bolting of certain doors in  the  balcony  caused  panic
and resulted in delayed escape of most of the spectators  occupying  balcony
seats. Most  of  the  spectators  were  subsequently  rescued  by  the  fire
fighters, but they were severely affected by the smoke. The  fire  was  soon
declared a major one and rescue operations continued till about 7:30pm.  The
entire mishap claimed lives of 59 persons besides  injuries  to  nearly  100
others.


8.   It is pertinent to note here that initially there  were  two  exits  in
the balcony portion of the cinema theatre. One portion was open as an  exit,
whereas another had been closed down on account of certain additional  seats
placed near the exit. The additional seats were  arranged  with   permission
of all authorities concerned and even the second exit had also  been  closed
with permission of all authorities concerned.  The  representatives  of  the
departments  concerned  like  Home  Department,  Police   Department,   Fire
Department, etc. had visited the theatre before giving necessary  permission
for increase in the number of seats,  approval  of  the  changed  layout  of
seats and for closure of the second exit.

9.    Under these circumstances,  when  another  exit  had  been  closed  on
account of arrangement of additional seats, which had been done with  proper
permission of the concerned authorities, the spectators of the  balcony  had
to rush only towards one exit which was leading to  the  staircase,  already
occupied with toxic gases including carbon monoxide.

10.   Due to inhalation of toxic gases including carbon  monoxide,  most  of
the spectators, who had occupied balcony seats, collapsed in the balcony  or
on the staircase  and  ultimately  the  unfortunate  mishap,  which  is  the
subject matter of this case, took place.

11.   In view of the aforestated undisputed facts, the issue with regard  to
imposition of sentence upon the appellants is to be decided by us.   We  are
concerned with imposition of sentence  in  a  criminal  case  and  not  with
awarding  damages  in  a  civil  case.  Principles  for  deciding  both  are
different.

12.   In the  instant  case,  we  are  only  concerned  with  imposition  of
appropriate sentence for the reason that the appellants  have  already  been
convicted of the offences under Sections 304-A/337/338 read with Section  36
of the Indian Penal Code (IPC) and Section  14  of  the  Cinematograph  Act,
1952 and the conviction has been affirmed by this Court.

13.   One can say that if the second exit leading to another  staircase  had
not been closed, possibly the damage and deaths could have been  less.   The
reason for which the second exit was closed was  arrangement  of  additional
seats and change of layout of seats in the  balcony.   The  appellants,  the
owners of the cinema premises, were aware of the  fact  that  one  exit  had
been closed due to addition of seats and change in the layout of  the  seats
and the said fact could  have  exposed  the  spectators  to  the  risk  they
actually faced, which ultimately resulted  into  the  abovesaid  mishap.  Be
that as it may, the fact remains that the appellants have been found  guilty
and they have been convicted.

14.   On the issue of sentence, one of our brother Judges, T.S.  Thakur,  J.
has upheld rigorous imprisonment of one year which has been imposed  by  the
High Court.   So far as Gyan Sudha Misra, J. is concerned, she  was  of  the
view that the sentence imposed was insufficient and therefore, it should  be
enhanced and possibly because the heirs of the victims were  not  interested
in getting compensation, she was of the view that  appropriate  fine  should
be imposed upon the appellants, which should be used for  a  public  purpose
so that in future, in the event of any such mishap, the injured persons  can
be given prompt and effective treatment.  The learned Judge had,  therefore,
perhaps  rightly  thought  about  imposing  rigorous  imprisonment  of   one
additional year and looking at the fact that the victims  had  already  lost
their lives and the amount  of  fine  which  could  be  recovered  from  the
appellants can be used for  a  better  public  purpose,  the  learned  Judge
imposed fine of Rs.50 crore on  each  of  the  appellants  in  lieu  of  the
additional sentence which had been proposed by observing:-

“40. Hence, I am of the view that interest of justice to some  extent  would
be served by imposing on the Accused Appellants a substantial fine  and  not
merely a jail sentence. Thus, while the sentence of one year imposed by  the
High Court is upheld, the additional sentence  of  one  year  further  while
allowing the appeal of AVUT, is fit to be substituted by a  substantial  sum
of fine to be shared equally by the Appellants Sushil Ansal and Gopal  Ansal
along with DVB which also can  not  absolve  itself  from  compensating  the
victims of Uphaar tragedy represented by the AVUT”.


“42. But while allowing the appeal of AVUT and CBI, I take note of the  fact
that since Sushil Ansal is now more than 74 years old and  was  running  the
theatre business essentially along with his brother Appellant  No.  2  Gopal
Ansal, I consider that the period of  enhanced  sentence  in  these  appeals
imposed on the Appellants Sushil Ansal and Gopal Ansal  may  be  substituted
with substantial amount of fine to be specified hereinafter and paid in  the
appeal bearing Nos. 600-602 of 2010 preferred by AVUT  and  Criminal  Appeal
Nos. 605-616 of 2010 preferred by the CBI  which  shall  be  shared  by  the
Appellant Sushil Ansal and Appellant Gopal  Ansal  in  equal  measure  along
with the Delhi Vidyut Board as I have upheld the sentence imposed  on  their
employees too. My view stands fortified by the order passed in the  case  of
Bhopal Gas Leak Tragedy where the punishment  for  criminal  negligence  was
allowed to be substituted by substantial compensation  which  were  paid  to
the victims or their legal representatives”.

15.   Shri Ram Jethmalani, learned senior counsel,  submitted  that  in  the
facts and circumstances of the present case, the amount of  fine  of  Rs.100
crore may be reduced and the view expressed  by  Misra,  J.  to  reduce  the
sentence of appellant - Sushil Ansal (A-1) to the period  already  undergone
considering his advanced age, be also made applicable to Gopal  Ansal  (A-2)
on the principle of parity.  He  submitted  that  both  the  appellants  had
already undergone substantial part of the sentence out of  sentence  of  one
year awarded to them and were willing  to  pay  substantial  amount  towards
fine in lieu of the  undergoing  remaining  period  of  sentence.   He  also
pointed out that out of  one  year  sentence,  they  had  already  undergone
substantive sentence of 5-6 months and with remissions,  sentence  undergone
worked out to about nine months.

16.   We have duly considered the matter.  It hardly needs to  be  mentioned
that an appropriate sentence has to be awarded by taking into  consideration
the gravity of offence, the manner of commission, the  age  of  the  accused
and other mitigating and aggravating  circumstances.   The  sentence  should
neither be excessively harsh nor ridiculously low.

17.   We are conscious of the fact that matter of this  magnitude  may  call
for a higher sentence, but the Court has  to  limit  itself  to  the  choice
available under the law prescribing sentence. The fact that remains is  that
the maximum sentence prescribed under the law is period  of  two  years  and
the High Court had chosen, in the facts and circumstances of  the  case,  to
award sentence of one year which has been approved by  Thakur,  J.   In  the
dissenting opinion by Misra, J. the modification is  that  the  sentence  be
enhanced but giving an option to pay  substantial  amount  in  lieu  of  the
enhanced sentence with further direction to reduce the jail sentence to  the
period already undergone,  if  the  amount  of  fine  in  lieu  of  enhanced
sentence is paid.

18.   After having considered the facts of the case, the views expressed  by
both the learned Judges and the arguments advanced by  the  learned  counsel
appearing for both sides, we are in agreement with  the  view  expressed  by
Misra, J. that sentence awarded by the High Court needs to  be  enhanced  to
the maximum period  of  two  years  under  Section  304-A  but  in  lieu  of
additional period of sentence of one year, the substantial  amount  of  fine
needs to be imposed.  We are further of the  view  that  in  case  the  said
amount of fine is paid,  the  sentence  should  be  reduced  to  the  period
already undergone, as indicated by Misra, J. in the  case  of  Sushil  Ansal
(A1). On the principle of parity, the case of Gopal Ansal  (A2)  will  stand
on the same footing as that of Sushil Ansal  (A1).   Thus,  we  are  of  the
considered opinion that ends of justice would meet  if  the  appellants  are
directed to pay fine so that the amount of fine can be used either  for  the
purpose of setting up a Trauma Centre in  NCT  of  Delhi  or  for  upgrading
Trauma Centres of Hospitals managed in NCT of Delhi  by  the  Government  of
Delhi.

19.   We, therefore, direct that a fine of Rs.30  crore  on  each  appellant
should be imposed and if the said fine is paid  within  a  period  of  three
months, the sentence of the appellants be reduced to  the  sentence  already
undergone.  We have noted the fact that as appellant no.1  is  fairly  aged,
it may not be fruitful to ask him to undergo rigorous imprisonment.  On  the
ground of parity and  on  the  peculiar  facts  of  this  case,  so  far  as
appellant no.2 may also not be constrained to undergo the  sentence,  if  he
also pays the same amount of fine. If the aforestated  amount  is  not  paid
within three months from the date of order  dated  19th  August,  2015,  the
appellants shall undergo two years’  rigorous  imprisonment,  including  the
sentence already undergone.

CRIMINAL APPEAL NO. 599/2010:-

20.   As regards the conviction of Appellant H.S. Panwar (A-15) assailed  in
Criminal Appeal No.  599/2010,  the  Ld.  Judges  dismissed  the  afore-said
appeal and affirmed the conviction u/s. 304-A/337/338 read with S.  36  IPC.
On the question of quantum of sentence qua  Appellant  H.S.  Panwar  (A-15),
the matter was placed before us as stated above.

21. In view of the facts discussed above and on the  ground  of  parity,  we
direct that Appellant  Harsarup  Panwar  (A-15)  shall  stand  sentenced  to
undergo rigorous imprisonment for  one  year.   However,  having  regard  to
advanced age and diseases like alzheimer’s disease suffered by  the  accused
and other peculiar facts and circumstances, if he pays Rs.10 lakh by way  of
fine, the sentence will stand reduced to the period  already  undergone.  If
he fails to pay the aforestated amount within three months  from  the  order
dated 19th August,  2015,  he  shall  undergo  the  sentence  of  one  year,
including the term which he  has  already  undergone.   Now,  we  have  been
informed that Appellant Harsarup Panwar (A-15) has already paid  Rs.10  lakh
as per operative order pronounced on 19th August, 2015.

22.  The aforestated fine imposed upon the appellants  in  Criminal  Appeals
No. 597, 598 and 599 of 2010 filed by Sushil Ansal (A-1), Gopal Ansal  (A-2)
and Harsarup Panwar (A-15) shall be given by way of a demand  draft  to  the
Chief Secretary of Delhi Government for setting up a new  trauma  centre  or
for upgrading the existing  trauma  centres  of  hospitals  managed  by  the
Government of NCT of Delhi.



CRIMINAL APPEAL NOs.600-602, 605, 606 and 613 of 2010


23. Consequently, Criminal Appeal No. 605, 606 and 613 of 2010 filed by  the
State and Criminal Appeal No. 600-602 of 2010 filed by  the  Association  of
Victims of Uphaar Tragedy are disposed of.

24.   In view of the above order, the impugned judgment stands  modified  so
far as the question of imposition of sentence is concerned and  the  appeals
are disposed of as partly allowed.


25.   We had passed the operative part of the order on  19th  August,  2015,
but since the Court time was almost over, we have now given the reasons  for
the said order.


                                       ………................................J.
                                      (ANIL R. DAVE)



                                       ………................................J.
                                      (KURIAN JOSEPH)


                                        ………...............................J.
                                               (ADARSH KUMAR GOEL)
NEW DELHI
SEPTEMBER 22,  2015

It is interesting to note that even though the law governing the arbitration agreement was not specified, yet this Court held, having regard to various circumstances, that the seat of arbitration would be London and therefore, by necessary implication, the ratio of Bhatia International would not apply. 20. The last paragraph of Bharat Aluminium’s judgment has now to be read with two caveats, both emanating from paragraph 32 of Bhatia International itself – that where the Court comes to a determination that the juridical seat is outside India or where law other than Indian law governs the arbitration agreement, Part-I of the Arbitration Act, 1996 would be excluded by necessary implication. Therefore, even in the cases governed by the Bhatia principle, it is only those cases in which agreements stipulate that the seat of the arbitration is in India or on whose facts a judgment cannot be reached on the seat of the arbitration as being outside India that would continue to be governed by the Bhatia principle. Also, it is only those agreements which stipulate or can be read to stipulate that the law governing the arbitration agreement is Indian law which would continue to be governed by the Bhatia rule.On the facts in the present case, it is clear that this Court has already determined both that the juridical seat of the arbitration is at London and that the arbitration agreement is governed by English law. This being the case, it is not open to the Union of India to argue that Part-I of the Arbitration Act, 1996 would be applicable. A Section 14 application made under Part-I would consequently not be maintainable. It needs to be mentioned that Shri Ranjit Kumar’s valiant attempt to reopen a question settled twice over, that is by dismissal of both a review petition and a curative petition on the very ground urged before us, must meet with the same fate. His argument citing the case of Mathura Prasad Bajoo Jaiswal v. Dossibai N.B. Jeejeebhoy, (1970) 1 SCC 613, that res judicata would not attach to questions relating to jurisdiction, would not apply in the present case as the effect of clause 34.2 of the PSC raises at best a mixed question of fact and law and not a pure question of jurisdiction unrelated to facts. Therefore, both on grounds of res judicata as well as the law laid down in the judgment dated 28.5.2014, this application under Section 14 deserves to be dismissed. It is also an abuse of the process of the Court as has rightly been argued by Dr. Singhvi. It is only after moving under the UNCITRAL Arbitration Rules and getting an adverse judgment from the Permanent Court of Arbitration dated 10.06.2013 that the present application was filed under Section 14 of the Arbitration Act two days later i.e. on 12.6.2013. Viewed from any angle therefore, the Delhi High Court judgment is correct and consequently this Special Leave Petition is dismissed.

                                                                  REPORTABLE








                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

               SPECIAL LEAVE PETITION (CIVIL) NO.11396 OF 2015


UNION OF INDIA                    …PETITIONER

                                   VERSUS

RELIANCE INDUSTRIES LIMITED
& ORS.                                 …RESPONDENTS



                        J U D G M E N T

R.F. Nariman, J.

The present case arises as a sequel to this Court’s  decision  delivered  on
28th May, 2014 in Reliance  Industries  Limited  and  another  v.  Union  of
India, (2014) 7 SCC 603.



A brief résumé of the facts that led to the judgment of this Court  on  28th
May, 2014 are as follows:-

Two Production Sharing Contracts (hereinafter referred  to  as   “PSC”)  for
the Tapti and Panna Mukta Fields were executed between  Reliance  Industries
Limited, the Union of India, Enron Oil and Gas India Limited and  the  ONGC.
The relevant clauses of the PSCs insofar  as  they  are  applicable  to  the
present controversy are as follows:-



“ARTICLE 32: APPLICABLE LAW AND LANGUAGE OF THE CONTRACT



32.1  Subject to the provisions of Article 33.12,  this  Contract  shall  be
governed and interpreted in accordance with the laws of India.



32.2   Nothing  in  this  Contract  shall  entitle  the  Government  or  the
Contractor to exercise the rights, privileges and powers conferred  upon  it
by this Contract in a manner which will contravene the laws of India.



ARTICLE 33: SOLE EXPERT, CONCILIATION AND ARBITRATION



33.9  Arbitration proceedings shall be  conducted  in  accordance  with  the
arbitration rules of the United Nations Commission  on  International  Trade
Law (UNCITRAL) of 1985 except that in the  event  of  any  conflict  between
these rules and the provisions of this Article 33, the  provisions  of  this
Article 33 shall govern.



33.12  The venue  of conciliation or  arbitration  proceedings  pursuant  to
this Article, unless the Parties otherwise agree, shall be  London,  England
and shall be conducted in the English Language.  The  arbitration  agreement
contained in this Article 33 shall be  governed  by  the  laws  of  England.
Insofar as practicable, the Parties shall continue to  implement  the  terms
of this Contract notwithstanding the initiation of arbitral proceedings  and
any pending claim or dispute.

34.2  This Contract shall not be amended, modified, varied  or  supplemented
in any respect except  by  an  instrument  in  writing  signed  by  all  the
Parties,  which  shall  state  the  date  upon  which   the   amendment   or
modification shall become effective.”





3.    It needs to be mentioned that the  PSCs  were  amended  to  substitute
Enron Oil & Gas India Limited  with  BG  Exploration  and  Production  India
Limited on 10.1.2005.  Since certain disputes and differences arose  between
the Union of India and Reliance Industries Limited  sometime  in  2010,  the
Union of India invoked  the  arbitration  clause  and  appointed  Mr.  Peter
Leaver, QC as Arbitrator.  Reliance  Industries  Limited  appointed  Justice
B.P. Jeevan Reddy as Arbitrator and Mr. Christopher Lau SC was appointed  as
Chairman of the Tribunal.   On  14.9.2011,  the  Union  of  India,  Reliance
Industries Limited and BG Exploration and Production India  Limited,  agreed
to change the seat of arbitration to London, England  and  a  final  partial
consent award was made and duly signed by the parties to  this  effect.   On
12.9.2012, the Arbitral Tribunal passed a final partial award  which  became
the subject matter of a Section 34 petition filed in the  Delhi  High  Court
by the Union of  India,  dated  13.12.2012.   The  Delhi  High  Court  by  a
judgment and order dated 22.3.2013 decided  that  the  said  petition  filed
under Section 34 was maintainable.  This Court in a detailed judgment  dated
28.5.2014 reversed the Delhi High Court.   Since  this  judgment  in  effect
determines the controversy raised in the present SLP,  it  is  important  to
set it out in some detail.  After stating the facts and the  contentions  of
both parties, this Court held:

“Before we analyse the submissions made by the learned  Senior  Counsel  for
both the parties, it would be appropriate to notice the various factual  and
legal points on which the parties are agreed. The controversy  herein  would
have to be decided on the basis of the law declared by this Court  in Bhatia
International [(2002) 4 SCC 105] . The parties are agreed  and  it  is  also
evident  from  the  final  partial  consent  award  dated   14-9-2011   that
the juridical seat (or legal place) of arbitration for the purposes  of  the
arbitration initiated under the claimants' notice of arbitration  dated  16-
12-2010 shall be London, England. The parties are also agreed that  hearings
of the notice of arbitration may take place at Paris, France,  Singapore  or
any other location the Tribunal considers may  be  convenient.  It  is  also
agreed by the parties that the  terms  and  conditions  of  the  arbitration
agreement in Article 33 of the PSCs shall remain in full  force  and  effect
and be applicable to the arbitration proceedings.
The essential dispute between the parties is as to whether  Part  I  of  the
Arbitration Act, 1996 would  be  applicable  to  the  arbitration  agreement
irrespective of the fact that the seat of arbitration is outside  India.  To
find a conclusive answer to the issue as to whether applicability of Part  I
of the Arbitration Act, 1996 has been excluded, it  would  be  necessary  to
discover the intention of the parties. Beyond this parties  are  not  agreed
on any issue.
We are  also  of  the  opinion  that  since  the  ratio  of  law  laid  down
in Balco [Balco v. Kaiser Aluminium Technical Services Inc.,  (2012)  9  SCC
552 : (2012) 4 SCC (Civ) 810] has been made prospective in operation by  the
Constitution Bench itself, we are bound by the decision  rendered  in Bhatia
International [(2002) 4 SCC 105] . Therefore, at the  outset,  it  would  be
appropriate to reproduce the relevant ratio of Bhatia  International [(2002)
4 SCC 105] in para 32 which is as under: (SCC p. 123)

“32. To conclude, we hold that the provisions of Part I would apply  to  all
arbitrations  and  to  all  proceedings   relating   thereto.   Where   such
arbitration is held in India the provisions of  Part  I  would  compulsorily
apply and parties are free to deviate only to the extent  permitted  by  the
derogable provisions  of  Part  I.  In  cases  of  international  commercial
arbitrations held out of India provisions of Part I would apply  unless  the
parties by agreement,  express  or  implied,  exclude  all  or  any  of  its
provisions. In that case the laws or  rules  chosen  by  the  parties  would
prevail. Any provision, in Part I, which is contrary to or excluded by  that
law or rules will not apply.”

In view of the aforesaid, it would be  necessary  to  analyse  the  relevant
articles of the PSC, to discover the real intention of  the  parties  as  to
whether the provisions of the Arbitration Act, 1996 have been  excluded.  It
must, immediately,  be  noticed  that  Articles  32.1  and  32.2  deal  with
applicable law and language of the contract as is evident from  the  heading
of the article which is “Applicable  law  and  language  of  the  contract”.
Article 32.1 provides for the proper  law  of  the  contract  i.e.  laws  of
India. Article  32.2  makes  a  declaration  that  none  of  the  provisions
contained in the  contract  would  entitle  either  the  Government  or  the
contractor to exercise the rights, privileges and powers conferred  upon  it
by the contract in a manner which would contravene the laws of India.
Article 33 makes a very detailed provision with regard to the resolution  of
disputes through arbitration. The two articles do not  overlap—one  (Article
32) deals with the proper law of the contract, the other (Article 33)  deals
with ADR i.e. consultations between the parties; conciliation; reference  to
a sole expert  and  ultimately  arbitration.  Under  Article  33,  at  first
efforts should  be  made  by  the  parties  to  settle  the  disputes  among
themselves (Article 33.1). If these efforts fail, the parties  by  agreement
shall refer the dispute to a sole expert (Article 33.2). The provision  with
regard to constitution of the Arbitral Tribunal provides that  the  Arbitral
Tribunal shall consist of three arbitrators  (Article  33.4).  This  article
also provides that each party shall appoint one arbitrator. The  arbitrators
appointed by the parties shall appoint the third arbitrator.  In  case,  the
procedure under Article 33.4 fails, the aggrieved  party  can  approach  the
Permanent  Court  of  Arbitration  at  The  Hague  for  appointment  of   an
arbitrator (Article 33.5). Further, in case  the  two  arbitrators  fail  to
make the  appointment  of  the  third  arbitrator  within  30  days  of  the
appointment of the second arbitrator, again the  Secretary  General  of  the
Permanent Court of Arbitration at The Hague may, at the  request  of  either
party appoint the third arbitrator. In the face of this, it is difficult  to
appreciate the  submission  of  the  respondent  Union  of  India  that  the
Arbitration Act, 1996 (Part  I)  would  be  applicable  to  the  arbitration
proceedings. In the event, the Union of India intended to  ensure  that  the
Arbitration Act, 1996 shall apply to the  arbitration  proceedings,  Article
33.5 should have  provided  that  in  default  of  a  party  appointing  its
arbitrator, such arbitrator may, at  the  request  of  the  first  party  be
appointed by the Chief  Justice  of  India  or  any  person  or  institution
designated by him. Thus, the Permanent Court of  Arbitration  at  The  Hague
can be approached for the appointment of the arbitrator, in case of  default
by any of the parties. This, in our opinion, is  a  strong  indication  that
applicability of the Arbitration Act, 1996 was excluded by  the  parties  by
consensus. Further, the arbitration  proceedings  are  to  be  conducted  in
accordance with the Uncitral Rules, 1976 (Article 33.9). It is  specifically
provided that  the  right  to  arbitrate  disputes  and  claims  under  this
contract shall survive the termination of this contract (Article 33.10).
The article which provides the basis of the controversy  herein  is  Article
33.12 which provides that venue of the arbitration shall be London and  that
the arbitration agreement shall be governed  by  the  laws  of  England.  It
appears, as observed earlier, that by a final  partial  consent  award,  the
parties have agreed that the juridical seat (or legal place of  arbitration)
for the purposes of arbitration initiated under  the  claimants'  notice  of
arbitration dated 16-12-2010 shall be London, England.
We are of the opinion, upon a meaningful reading of the  aforesaid  articles
of the PSC, that the proper law of the contract is Indian  law;  proper  law
of the arbitration agreement is the law of England.  Therefore,  can  it  be
said as canvassed by the respondents, that applicability of the  Arbitration
Act, 1996 has not been excluded?” [at paras 36 - 42]





4.    The Court went on to state in paragraph 45 that it is too late in  the
day to contend  that  the  seat  of  arbitration  is  not  analogous  to  an
exclusive jurisdiction clause and then went on to hold as follows:-

“In our opinion, these observations in Sulamerica case [(2013) 1 WLR  102  :
2012 EWCA Civ 638 : 2012 WL 14764] are fully applicable  to  the  facts  and
circumstances of this case. The conclusion reached by the High  Court  would
lead to the chaotic situation  where  the  parties  would  be  left  rushing
between India and England for redressal of their grievances. The  provisions
of Part I of the Arbitration Act, 1996 (Indian)  are  necessarily  excluded;
being wholly inconsistent with  the  arbitration  agreement  which  provides
“that arbitration agreement shall be governed  by  English  law”.  Thus  the
remedy  for  the  respondent  to  challenge  any  award  rendered   in   the
arbitration proceedings would lie under the  relevant  provisions  contained
in the Arbitration Act, 1996 of England and Wales. Whether or  not  such  an
application would now be entertained by the courts in England is not for  us
to examine, it  would  have  to  be  examined  by  the  court  of  competent
jurisdiction in England.” [at para 57]



It ultimately concluded:



“We are also unable to agree with the submission of Mr  Ganguli  that  since
the issues involved herein relate to the public policy of India, Part  I  of
the Arbitration Act, 1996 would be applicable. Applicability of  Part  I  of
the Arbitration Act, 1996 is not dependent on the  nature  of  challenge  to
the award. Whether or not the award is challenged on the  ground  of  public
policy, it would have to satisfy the precondition that the Arbitration  Act,
1996 is applicable to the arbitration agreement. In our  opinion,  the  High
Court has committed a jurisdictional error in holding  that  the  provisions
contained in Article 33.12 are relevant only for the  determination  of  the
curial law applicable to the proceedings. We have  already  noticed  earlier
that the parties by agreement have provided that the juridical  seat of  the
arbitration shall be in London. Necessary amendment has also  been  made  in
the PSCs, as recorded by the final partial consent  award  dated  14-9-2011.
It is  noteworthy  that  the  Arbitration  Act,  1996  does  not  define  or
mention juridical seat. The term “juridical  seat”  on  the  other  hand  is
specifically  defined  in  Section  3  of  the  English   Arbitration   Act.
Therefore, this would clearly indicate that the parties understood that  the
arbitration  law  of  England  would  be  applicable  to   the   arbitration
agreement.



In view of the aforesaid, we are unable to uphold the conclusion arrived  at
by the Delhi High Court that the applicability of the Arbitration Act,  1996
to the arbitration agreement in the present case has not been excluded.



 In view of the above, we hold that:



The petition filed by respondents under Section 34 of the  Arbitration  Act,
1996 in the Delhi High Court is not maintainable.



We further overrule and set aside the conclusion of  the  High  Court  that,
even though the arbitration agreement would  be  governed  by  the  laws  of
England and that the juridical seat of arbitration would be in London,  Part
I of the Arbitration Act would still be applicable  as  the  laws  governing
the substantive contract are Indian laws.



In  the  event  a  final  award  is  made  against   the   respondent,   the
enforceability of the same in India can be resisted on the ground of  public
policy.



The conclusion of the High Court that in the event, the award is  sought  to
be enforced outside India, it would leave the  Indian  party  remediless  is
without any basis  as  the  parties  have  consensually  provided  that  the
arbitration agreement will be governed by the English  law.  Therefore,  the
remedy against the award will have  to  be  sought  in  England,  where  the
juridical seat  is  located.  However,  we  accept  the  submission  of  the
appellant that since the substantive law governing the  contract  is  Indian
law, even the courts in England, in case the  arbitrability  is  challenged,
will have to decide the issue by applying Indian law viz. the  principle  of
public policy, etc. as it prevails in Indian law.



In view of the above, the  appeal  is  allowed  and  the  impugned  judgment
[(2013) 199 DLT 469] of the High Court is set aside.” [at paras 74 - 77]”



5.    Continuing the narration of facts, the present SLP  arises  out  of  a
judgment dated 3.7.2014 whereby  the  Delhi  High  Court  has  dismissed  an
application filed under Section 14 of the Arbitration and Conciliation  Act,
1996, dated 12.6.2013, on  the  ground  that  this  Court’s  judgment  dated
28.5.2014 having held that Part-I  of  the  Arbitration  Act,  1996  is  not
applicable, such petition filed under Section 14 would not be  maintainable.




6.    It needs further to be pointed out that a review petition against  the
said judgment dated 28.5.2014 was dismissed  on  31.7.2014  and  a  curative
petition filed thereafter was also dismissed.



7.    Shri Ranjit Kumar, learned Solicitor General of  India  argued  before
us that the partial consent award dated 14.9.2011 was  without  jurisdiction
in that it was contrary to clause 34.2 of the PSC which stated that the  PSC
can only be amended if all the parties thereto by an  agreement  in  writing
amend it.  Since ONGC which was a party to the PSC  had  not  done  so,  the
said final partial consent award was without jurisdiction.  This  being  so,
the  seat  of  the  arbitration   cannot  be   said   to   be   London   and
clause  33.12  of  the  PSC  which made  the  “venue” London would  continue
to govern.  Since the arbitration clause contained in the PSC  is  prior  to
12.9.2012, the judgment in Bhatia  International  v.  Bulk  Trading  S.A.  &
Anr., (2002) 4  SCC  105  would  govern  and  consequently  Part  I  of  the
Arbitration Act,  1996  would  be  applicable.   He  also  stated  that  the
judgment delivered on 28.5.2014 would not stand in his  way  notwithstanding
that a review petition and a curative petition had already  been  dismissed.
This was because, according to him, the issue  raised  being  jurisdictional
in nature, the doctrine of res judicata would have no application.  He  went
on to read various provisions of the UK Arbitration  Act,  1996  to  further
buttress his submission.



8.     Dr.  A.M.  Singhvi,  learned  senior  counsel,  on  the  other   hand
vehemently opposed the arguments of Shri  Ranjit  Kumar,  learned  Solicitor
General of India.  According to him,  the  judgment  dated  28.5.2014  being
final inter partes binds the parties both by way of res judicata  and  as  a
precedent. According to him, the judgment unequivocally holds  that  on  the
very facts of this case Part-I of the Arbitration Act, 1996  would  have  no
application.  He further went on to demonstrate that the Union of India  had
already availed of the very remedy sought under Section 14 and  had  invited
a decision of the Permanent Court of Arbitration dated  10.6.2013  by  which
its objections to the appointment of Mr. Peter  Leaver  as  Arbitrator  were
already rejected.



9.    We have heard learned counsel for the  parties.   In  order  to  fully
appreciate the contention raised by the learned Solicitor General of  India,
it is necessary to delve into the history  of  the  law  of  arbitration  in
India. Prior to the 1996 Act, three Acts governed the law of Arbitration  in
India – the Arbitration (Protocol and  Convention)  Act,  1937,  which  gave
effect to the Geneva Convention, the  Arbitration  Act,  1940,  which  dealt
with domestic awards, and the Foreign Awards (Recognition  And  Enforcement)
Act, 1961 which gave effect to the New York Convention  of  1958  and  which
dealt with challenges to awards made which were foreign awards.



10.   In National Thermal Power Corporation v. Singer Company, (1992) 3  SCC
551, this Court while construing Section 9(b)  of  the  Foreign  Awards  Act
held that where an arbitration agreement was governed by the law  of  India,
the Arbitration Act, 1940 alone would apply and not the Foreign Awards  Act.
 The arbitration clause in Singer’s case read as follows:-



“Sub-clause 6 of Clause 27 of the General Terms deals  with  arbitration  in
relation to an Indian contractor and sub-clause 7 of the said  clause  deals
with arbitration in respect of a foreign contractor.  The  latter  provision
says:



“27.7  In  the  event  of  foreign  contractor,  the  arbitration  shall  be
conducted by three arbitrators, one each to be nominated by  the  owner  and
the  contractor  and  the  third  to  be  named  by  the  President  of  the
International Chamber of  Commerce,  Paris.  Save  as  above  all  rules  of
conciliation and arbitration of the International Chamber of Commerce  shall
apply to such arbitrations. The  arbitration  shall  be  conducted  at  such
places as the arbitrators may determine.”



In respect of an Indian contractor, sub-clause 6.2 of Clause  27  says  that
the arbitration shall be conducted at  New  Delhi  in  accordance  with  the
provisions of the Arbitration Act, 1940. It reads:



“27.6.2  The  arbitration  shall  be  conducted  in  accordance   with   the
provisions  of  the  Indian  Arbitration  Act,   1940   or   any   statutory
modification thereof. The venue of arbitration shall be New Delhi, India.”



The General Terms further provide:



“[T]he contract shall in all respects be construed  and  governed  according
to Indian laws.” (32.3).



The formal agreements which the parties executed on August 17, 1982  contain
a specific provision for settlement of disputes. Article 4.1 provides:



“4.1. Settlement of Disputes.—It is specifically agreed by and  between  the
parties that all the differences or disputes arising out of the contract  or
touching the subject-matter of the contract, shall be decided by process  of
settlement and arbitration as specified in Clauses 26.0 and  27.0  excluding
27.6.1 and 27.6.2., of the General Conditions of the Contract.” [at para 4]





11.   Notwithstanding that the award in that case was a foreign award,  this
Court held that since the substantive law of the  contract  was  Indian  law
and since the arbitration clause was part of the contract,  the  arbitration
clause would be governed  by  Indian  law  and  not  by  the  Rules  of  the
International Chamber of Commerce.  This being the case, it  was  held  that
the mere fact that the venue chosen by the ICC Court for the conduct of  the
arbitration proceeding was London does not exclude the operation of the  Act
which dealt with domestic awards i.e. the Act of  1940.   In  a  significant
sentence, the Court went on to hold:-

“…Nevertheless, the jurisdiction exercisable by the English courts  and  the
applicability of the laws of that country  in  procedural  matters  must  be
viewed as concurrent and consistent with the jurisdiction of  the  competent
Indian courts and the operation of Indian laws  in  all  matters  concerning
arbitration insofar as the main contract as well as that which is  contained
in the arbitration clause are governed by the laws of India.” [at para 53]





12.   It can be seen that this Court in Singer’s case did  not  give  effect
to the difference between the substantive law of the contract  and  the  law
that governed the arbitration.  Therefore, since a construction  of  Section
9(b) of the Foreign Awards Act led to the aforesaid  situation  and  led  to
the doctrine of  concurrent  jurisdiction,  the  1996  Act,  while  enacting
Section 9(a) of the  repealed  Foreign  Awards  Act,  1961,  in  Section  51
thereof, was careful enough to omit Section 9(b) of the 1961 Act  which,  as
stated hereinabove, excluded the Foreign Awards Act  from  applying  to  any
award made on arbitration agreements governed by the law of India.



13.   This being  the  case,  the  theory  of  concurrent  jurisdiction  was
expressly given a go-by with the dropping of Section  9(b)  of  the  Foreign
Awards Act, while enacting Part-II  of  the  Arbitration  Act,  1996,  which
repealed all the three earlier laws and put the law of arbitration into  one
statute, albeit in four different parts.



14.   However, this Court in Bhatia International v.  Bulk  Trading  S.A.  &
Anr.,  (2002)  4  SCC  105,  resurrected   this   doctrine   of   concurrent
jurisdiction by holding, in paragraph 32, that even where  arbitrations  are
held outside India, unless the parties agree to exclude the  application  of
Part-I of the Arbitration  Act,  1996,  either  expressly  or  by  necessary
implication, the courts in India will exercise concurrent jurisdiction  with
the court in the country in  which  the  foreign  award  was  made.   Bhatia
International was in the context of a Section 9 application made under Part-
I of the 1996 Act by the respondent in  that  case  for  interim  orders  to
safeguard the assets of the Indian company in case a foreign  award  was  to
be executed in India against it.  The reductio ad absurdum of this  doctrine
of concurrent jurisdiction came to be felt in a most poignant  form  in  the
judgment of Venture Global Engineering v. Satyam Computer  Services  Ltd.  &
Anr., (2008) 4 SCC 190, by which this Court held that a foreign award  would
also be considered as a domestic award and the challenge procedure  provided
in Section 34 of the Part-I of the Act of 1996 would therefore apply.   This
led to a situation where the  foreign  award  could  be  challenged  in  the
country in which it is made; it could also be  challenged  under  Part-I  of
the 1996 Act in India; and could be refused to be  recognised  and  enforced
under Section 48  contained in Part II of the 1996 Act.



15.   Given this state of the law, a 5-Judge Bench of this Court  in  Bharat
Aluminium Company Ltd. v. Kaiser Aluminium Technical Services, Inc.,  (2012)
9 SCC, overruled both Bhatia International and Venture  Global  Engineering.
But in so overruling these judgments, this Court went on to hold:

“The judgment in Bhatia International [(2002) 4 SCC  105]  was  rendered  by
this Court on  13-3-2002.  Since  then,  the  aforesaid  judgment  has  been
followed by all the High Courts  as  well  as  by  this  Court  on  numerous
occasions. In fact, the judgment  in Venture  Global  Engineering [(2008)  4
SCC 190] has been rendered on  10-1-2008  in  terms  of  the  ratio  of  the
decision in Bhatia International [(2002) 4 SCC 105] . Thus, in order  to  do
complete justice, we hereby order, that the law now declared by  this  Court
shall apply  prospectively,  to  all  the  arbitration  agreements  executed
hereafter.” [at para 197]




16.   It will thus be seen that facts like  the  present  case  attract  the
Bhatia International principle of concurrent jurisdiction  inasmuch  as  all
arbitration agreements entered into before 12.9.2012, that is  the  date  of
pronouncement of Bharat Aluminium Company’s judgment, will  be  governed  by
Bhatia International.

17.   It is important to note that in paragraph 32 of  Bhatia  International
itself this Court has held that Part-I of the  Arbitration  Act,  1996  will
not apply  if  it  has  been  excluded  either  expressly  or  by  necessary
implication.  Several judgments of this  Court  have  held  that  Part-I  is
excluded by necessary implication if it is found that  on  the  facts  of  a
case either the juridical seat of the arbitration is outside  India  or  the
law governing the arbitration agreement is a  law  other  than  Indian  law.
This is now well settled by a  series  of  decisions  of  this  Court  [see:
Videocon Industries Ltd. v. Union of India & Anr., (2011) 6 SCC  161,  Dozco
India Private Limited v. Doosan Infracore  Company  Limited,  (2011)  6  SCC
179,  Yograj  Infrastructure  Limited  v.   Ssang   Yong   Engineering   and
Construction Company Limited, (2011) 9 SCC 735), the very judgment  in  this
case reported in Reliance Industries Limited v. Union  of  India,  (2014)  7
SCC 603, and a recent judgment in Harmony Innovation Shipping Ltd. v.  Gupta
Coal India Ltd. & Anr., (decided on 10th March, 2015  in  Civil  Appeal  No.
610 of 2015)].

18.   In fact, in Harmony’s case, this Court,  after  setting  out  all  the
aforesaid judgments,  set  out  the  arbitration  clause  in  that  case  in
paragraph 32 as follows:

“In view of the aforesaid propositions laid  down  by  this  Court,  we  are
required to scan the tenor of the clauses  in  the  agreement  specifically,
the arbitration clause in appropriate perspective. The said clause  read  as
follows:
“5. If any dispute or difference should arise under  this  charter,  general
average/arbitration in London to apply, one to be appointed by each  of  the
parties hereto, the third by the two so chosen, and their decision  or  that
of any two of them, shall be final and binding, and this agreement may,  for
enforcing the same, be made a rule  of  Court.  Said  three  parties  to  be
commercial men who are the members of the  London  Arbitrators  Association.
This contract is to be governed and construed according to English Law.  For
disputes where total amount claim  by  either  party  does  not  exceed  USD
50,000 the arbitration should be conducted in accordance with  small  claims
procedure of the Page 33 33 London Maritime  Arbitration  Association.”  [at
para 32]



It then held:

“Coming to the stipulations in the present arbitration clause, it  is  clear
as day that if any dispute or difference  would  arise  under  the  charter,
arbitration in London to apply; that the arbitrators are  to  be  commercial
men who are members of London Arbitration Association; the  contract  is  to
be construed and governed by English Law; and that  the  arbitration  should
be conducted, if the claim is for a lesser sum,  in  accordance  with  small
claims procedure of the London Maritime Arbitration  Association.  There  is
no other provision in the agreement that any  other  law  would  govern  the
arbitration clause.” [at para 41]
“Thus, interpreting the clause in question on the bedrock of  the  aforesaid
principles it is vivid that the intended effect  is  to  have  the  seat  of
arbitration at  London.  The  commercial  background,  the  context  of  the
contract and the circumstances of the  parties  and  in  the  background  in
which the contract was entered into, irresistibly lead  in  that  direction.
We are not impressed by the submission that by such interpretation  it  will
put the respondent in an  advantageous  position.  Therefore,  we  think  it
would be appropriate to interpret the clause that it is a proper  clause  or
substantial clause and not a  curial  or  a  procedural  one  by  which  the
arbitration proceedings are to be conducted and hence, we  are  disposed  to
think that the seat of arbitration will be at London.
Having  said  that  the  implied  exclusion   principle   stated   in Bhatia
International (supra) would be applicable, regard being had  to  the  clause
in the agreement, there is no need  to  dwell  upon  the  contention  raised
pertaining to the addendum,  for  any  interpretation  placed  on  the  said
document would not make any difference to the ultimate  conclusion  that  we
have already arrived at.” [at paras 46 and 47]

19.   It is interesting to note that even  though  the  law   governing  the
arbitration agreement was not specified, yet this Court held, having  regard
to various circumstances, that the seat of arbitration would be  London  and
therefore, by necessary  implication,  the  ratio  of  Bhatia  International
would not apply.
20.   The last paragraph of Bharat Aluminium’s judgment has now to  be  read
with two caveats, both emanating from paragraph 32 of  Bhatia  International
itself – that where the Court comes to a determination  that  the  juridical
seat is outside India or  where  law  other  than  Indian  law  governs  the
arbitration  agreement,  Part-I  of  the  Arbitration  Act,  1996  would  be
excluded by necessary implication.  Therefore, even in  the  cases  governed
by the Bhatia  principle,  it  is  only  those  cases  in  which  agreements
stipulate that the seat of the arbitration is in India or on whose  facts  a
judgment cannot be reached on the seat of the arbitration as  being  outside
India that would continue to be governed by the Bhatia principle.  Also,  it
is only those agreements which stipulate or can be read  to  stipulate  that
the law governing the  arbitration  agreement  is  Indian  law  which  would
continue to be governed by the Bhatia rule.
21.   On the facts in the present case, it is  clear  that  this  Court  has
already determined both that the juridical seat of  the  arbitration  is  at
London and that the arbitration agreement is governed by English law.   This
being the case, it is not open to the Union of India to  argue  that  Part-I
of the Arbitration Act, 1996 would be applicable.  A Section 14  application
made under Part-I would consequently not be maintainable.  It  needs  to  be
mentioned that Shri Ranjit Kumar’s valiant  attempt  to  reopen  a  question
settled twice over, that is by dismissal of both a  review  petition  and  a
curative petition on the very ground urged before us,  must  meet  with  the
same fate. His argument citing the case of Mathura Prasad Bajoo  Jaiswal  v.
Dossibai N.B. Jeejeebhoy, (1970) 1 SCC 613, that  res  judicata   would  not
attach to questions  relating  to  jurisdiction,  would  not  apply  in  the
present case as the effect of clause 34.2 of the PSC raises at best a  mixed
question of fact and law and not a pure question of  jurisdiction  unrelated
to facts.  Therefore, both on grounds of res judicata as  well  as  the  law
laid down in the judgment dated 28.5.2014, this  application  under  Section
14 deserves to be dismissed.  It is also an abuse  of  the  process  of  the
Court as has rightly been argued by Dr. Singhvi.  It is  only  after  moving
under the UNCITRAL Arbitration Rules and getting an  adverse  judgment  from
the Permanent  Court  of  Arbitration  dated  10.06.2013  that  the  present
application was filed under Section 14  of  the  Arbitration  Act  two  days
later i.e. on 12.6.2013.  Viewed from any angle therefore,  the  Delhi  High
Court judgment is correct and consequently this Special  Leave  Petition  is
dismissed.
                                       ……………………J.

                                       (A.K. Sikri )





                                       ……………………J.

                                       (R.F. Nariman)

New Delhi;

September 22, 2015.