If a complaint was made in the name of the Company, it is necessary that a natural person represents such juristic person in the court and the court looks upon the natural person for all practical purposes. It is in this context that observations were made that the body corporate is a de jure complainant while the human being is a de facto complainant to represent the former in the court proceedings. Thus, no Magistrate could insist that the particular person whose statement was taken on oath alone can continue to represent the Company till the end of the proceedings. Not only that, even if there was initially no authority the Company can at any stage rectify that defect by sending a competent person.

REPORTABLE

 IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

 CRIMINAL APPEAL NO.1105 OF 2021

BHUPESH RATHOD … Appellant

Versus

DAYASHANKAR PRASAD CHAURASIA & ANR. …Respondents

J U D G M E N T

SANJAY KISHAN KAUL, J.

1. Dayashankar Chaurasia, the respondent issued eight (8) cheques of

Rs.20,000/- each totalling to Rs.1,60,000/- in favour of M/s. Bell

Marshall Telesystems Limited (for short ‘the Company’). The cheques

were drawn on HDFC Bank, Vasai (E) Branch, Mumbai. These cheques

were drawn on different dates but were presented together for payment

on 10.05.2006. All the cheques got dishonoured on account of “funds

insufficient” as per Bank Memos issued on 12.05.2006. On the cheques

being dishonoured, legal notices were issued by the beneficiary under

1

Section 138(b) of the Negotiable Instruments Act, 1881 (hereinafter

referred to as the ‘NI Act’) on 26.05.2006. The demand was, however

not met within fifteen (15) days of the receipt of the notice nor was any

reply sent which resulted in the complaint bearing No.160/SS/07 being

filed on 07.07.2006 by Mr. Bhupesh Rathod before the Special

Metropolitan Magistrate, Mumbai. The complaint was accompanied by a

Board Resolution of the Company dated 17.05.2006 authorising Mr.

Bhupesh Rathod to initiate legal action against the respondent on behalf

of the Company. On 24.12.2007, the Company filed an affidavit through

its Managing Director, i.e., Mr. Bhupesh Rathod, stating that it had

authorised him through the abovementioned Board Resolution to file a

complaint case against the respondent.

2. In view of the fact that much turns on the manner of description of

the complainant, we reproduce the description of the complainant as

under:

“Mr. Bhupesh M. Rathod

Managing Director of M/s. Bell

Marshall Telesystems Ltd.

Aged: 41 years, Occupation: Business

Having address at 1107, V Maker

Chamber, Nariman Point

Mumbai- 400021.”

2

3. The Board Resolution passed on 17.05.2006 is in the following

terms:

“RESOLVED THAT legal action be initiated against

Dayashankar Prasad Choursiya for the dishonour of chqs issued

by him and in discharge of this liabilities to the company and

Mr. Bhupesh Rathod/Sashikant Ganekar is hereby authorized to

appoint advocates, issues of notices through advocate, file

complaint, Verifications on Oath, appoint Constituent attorney

to file complaint in the court and attend all such affairs which

may be needed in the process of legal actions.”

For Bell Marshal Tele Systems LTD.

Sd/-

Dated: 17/05/2006

Director”

4. We reproduce the aforesaid as the competency and the manner of

filing of the complaint are the primary considerations debated before us.

5. The case made out in the complaint is that a sum of Rs.1,60,000/-

was advanced to the respondent by the Company and the cheques were

issued to repay the loan. The respondent took an objection that the

complaint was filed in the personal capacity of Mr. Bhupesh Rathod and

not on behalf of the Company. While on the other hand it was contended

by the appellant that the complaint was in the name of the Company and

in the cause title of the complaint he had described himself as the

Managing Director. The Company was a registered company under the

3

Companies Act, 1956. The registration certificate, however, was not

placed on record. On this aspect, it was the further submission of the

respondent that it is only in the aforesaid title description that the

complainant is described as the Managing Director of the Company but

in the body of the complaint it is not so mentioned.

6. The trial court acquitted the respondent on 12.03.2009 based on a

dual reasoning –

(a) there was no document except the promissory note signed by

the respondent to show that the loan was being granted; and

(b) the Board Resolution itself was not signed by the Board of

Directors (it may be stated that this was really a true copy of the

Board Resolution).

7. The appellant preferred an appeal before the High Court. The

High Court by the impugned order dated 03.08.2015 dismissed the

appeal.

8. It may be relevant to note that the High Court traversed many

paths while coming to this conclusion. In a nutshell the reasoning was:

(a) it could not be said that the complaint had been filed by a payee

or holder in due course as mandated under Section 142(a) of the NI

4

Act;

(b) the payee was the Company and a perusal of the complaint did

not show that the complaint was filed by the Company. It had been

filed by the appellant who had described himself as the Managing

Director of the Company only in the cause title of the complaint;

(c) probably a conscious choice was made to not file the complaint

in the name of the Company as it was unclear whether the

Company was authorised to advance loans.

9. We may note that the High Court did not give its imprimatur to the

entire reasoning of the trial court as it noticed that the demand notice was

sent on behalf of the Company. Thus, the Company was aware that the

complaint had to be filed by the Company itself. It was observed that the

aforesaid aspect was probably left vague on purpose by the Company and

therefore, it was opined that the complaint had not been filed by the

payee in terms of Section 142 of the NI Act.

Complainant’s/Appellant’s submissions:

10. The appellant contended before us that it was quite apparent from

the cause title of the complaint which is an integral part of the complaint,

5

that the same had been filed on behalf of the Company. It was further

contended that this was the reason that the Board Resolution authorising

the Managing Director to file a complaint for dishonour of the cheques

was annexed. The address given was of the Company, which was the

registered office address. The affidavit filed in the cross-examination in

pursuance thereto left no manner of doubt that the complaint was filed as

the Managing Director of the Company.

11. It is the say of the appellant that there is a presumption under

Section 139 and 118 of the NI Act which was not rebutted by the

respondent. It was further contended that a duly signed cheque was

sufficient to raise a presumption under Section 139 of the NI Act against

the respondent as held in Triyambak S. Hegde v. Sripad1

. It was not the

say of the respondent in defence that the cheque was not signed by him

or was signed under any fraud or misrepresentation.

12. It was submitted that a very hyper technical view of the matter had

been taken and it only related to the format of the filing of the complaint

and not the substance. The trial court itself had accepted that the

complaint was filed on behalf of the Company as otherwise it would have

refused to take cognizance under Section 142(a) of the NI Act. The

1 Crl. Appeal Nos. 849­850/2011 decided on 23.09.2021.

6

respondent had not even challenged the summoning order on the ground

that the complaint is not filed on behalf of the Company.

Respondent’s submissions:

13. Learned counsel for the respondent, however, contended that the

appellant had failed to prove his case beyond reasonable doubt and the

complaint itself was not in a proper form. The complaint and the Board

Resolution did not lead to a conclusion that it was filed on behalf of the

Company. The Board Resolution was also not signed by the Directors of

the Company nor does it find that it authorises the complainant to file the

complaint.

14. The respondent also contended that no loan was advanced by the

Company nor has it been proved as to whose account the alleged loan

was advanced to. No loan agreement in favour of the Company was

placed on record.

Our View:

15. We have examined the submissions of the learned counsel for the

parties.

16. To decide the controversy the relevant Sections of the NI Act are

7

extracted as under:

“138. Dishonour of cheque for insufficiency, etc., of funds in

the account. — Where any cheque drawn by a person on an

account maintained by him with a banker for payment of any

amount of money to another person from out of that account for

the discharge, in whole or in part, of any debt or other liability,

is returned by the bank unpaid, either because of the amount of

money standing to the credit of that account is insufficient to

honour the cheque or that it exceeds the amount arranged to be

paid from that account by an agreement made with that bank,

such person shall be deemed to have committed an offence and

shall, without prejudice to any other provision of this Act, be

punished with imprisonment for [a term which may be

extended to two years], or with fine which may extend to twice

the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply

unless--

(a) the cheque has been presented to the bank within a period of

six months from the date on which it is drawn or within the

period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the

case may be, makes a demand for the payment of the said

amount of money by giving a notice; in writing, to the drawer

of the cheque, [within thirty days] of the receipt of information

by him from the bank regarding the return of the cheque as

unpaid; and

(c) the drawer of such cheque fails to make the payment of the

said amount of money to the payee or, as the case may be, to

the holder in due course of the cheque, within fifteen days of

the receipt of the said notice.”

.... .... .... .... ....

“139. Presumption in favour of holder.— It shall be

presumed, unless the contrary is proved, that the holder of a

8

cheque received the cheque of the nature referred to in section

138 for the discharge, in whole or in part, of any debt or other

liability.”

.... .... .... .... ....

“118. Presumptions as to negotiable instruments.— Until the

contrary is proved, the following presumptions shall be made:

—

(g) that holder is a holder in due course:— that the holder of a

negotiable instrument is a holder in due course : provided that,

where the instrument has been obtained from its lawful owner,

or from any person in lawful custody thereof, by means of an

offence or fraud, or has been obtained from the maker or

acceptor thereof by means of an offence or fraud, or for

unlawful consideration, the burden of proving that the holder is

a holder in due course lies upon him.”

.... .... .... .... ....

“142. Cognizance of offences.— Notwithstanding anything

contained in the Code of Criminal Procedure, 1973 (2 of 1974),

—

(a) no court shall take cognizance of any offence punishable

under section 138 except upon a complaint, in writing, made by

the payee or, as the case may be, the holder in due course of the

cheque;

(b) such complaint is made within one month of the date on

which the cause of action arises under clause (c) of the proviso

to section 138:

[Provided that the cognizance of a complaint may be taken by

the Court after the prescribed period, if the complainant

satisfies the Court that he had sufficient cause for not making a

complaint within such period;]

(c) no court inferior to that of a Metropolitan Magistrate or a

9

Judicial Magistrate of the first class shall try any offence

punishable under section 138.”

17. We must say at the inception that the respondent not having

disputed his signatures on the cheques, it was for the respondent to show

in what circumstances the cheques had been issued, i.e., why was it not a

cheque issued in due course. The words of Section 139 of the NI Act are

quite clear that unless the contrary is proved, it shall be presumed that the

holder of the cheque received the cheque of the nature referred to in

Section 138 for the discharge, in whole or in part, of any debt or other

liability. The respondent has not set up a case that the nature of

transaction was of the nature which fell beyond the scope of Section 138.

Other than taking a technical objection, really nothing has been said on

the substantive aspect.

18. The only eligibility criteria prescribed under Section 142(1)(a) is

that the complaint must be by the payee or the holder in due course.

19. In the conspectus of the aforesaid principles we have to deal with

the plea of the respondent that the complaint was not filed by the

competent complainant as it is the case that the loan was advanced by the

Company. As to what would be the governing principles in respect of a

10

corporate entity which seeks to file the complaint, an elucidation can be

found in the judgment of this Court in Associated Cement Co. Ltd. v.

Keshavanand2

. If a complaint was made in the name of the Company, it

is necessary that a natural person represents such juristic person in the

court and the court looks upon the natural person for all practical

purposes. It is in this context that observations were made that the body

corporate is a de jure complainant while the human being is a de facto

complainant to represent the former in the court proceedings. Thus, no

Magistrate could insist that the particular person whose statement was

taken on oath alone can continue to represent the Company till the end of

the proceedings. Not only that, even if there was initially no authority

the Company can at any stage rectify that defect by sending a competent

person.

20. The aforesaid judgment was also taken note of in a subsequent

judgment of this Court in M.M.TC Ltd. & Anr. v. Medchl Chemicals

and Pharma (P) Ltd. & Anr.3

.

21. We find that the judicial precedents cited aforesaid have been

breached by the Courts below. The High Court also embarked on a

2

(1998) 1 SCC 687.

3

(2002) 1 SCC 234.

11

discussion as to the vagueness of the identity of the complainant

and its relation with the legality of a loan which may be granted by

the Company, something that was not required to be gone into.

22. If we look at the format of the complaint which we have extracted

aforesaid, it is quite apparent that the Managing Director has filed the

complaint on behalf of the Company. There could be a format where the

Company’s name is described first, suing through the Managing Director

but there cannot be a fundamental defect merely because the name of the

Managing Director is stated first followed by the post held in the

Company.

23. It is also relevant to note that a copy of the Board Resolution was

filed along with the complaint. An affidavit had been brought on record

in the trial court by the Company, affirming to the factum of

authorisation in favour of the Managing Director. A Manager or a

Managing Director ordinarily by the very nomenclature can be taken to

be the person in-charge of the affairs Company for its day-to-day

management and within the activity would certainly be calling the act of

approaching the court either under civil law or criminal law for setting

12

the trial in motion.4

 It would be too technical a view to take to defeat the

complaint merely because the body of the complaint does not elaborate

upon the authorisation. The artificial person being the Company had to

act through a person/official, which logically would include the

Chairman or Managing Director. Only the existence of authorisation

could be verified.

24. While we turn to the authorisation in the present case, it was a

copy and, thus, does not have to be signed by the Board Members, as that

would form a part of the minutes of the Board meeting and not a true

copy of the authorisation. We also feel that it has been wrongly

concluded that the Managing Director was not authorised. If we peruse

the authorisation in the form of a certified copy of the Resolution, it

states that legal action has to be taken against the respondent for

dishonour of cheques issued by him to discharge his liabilities to the

Company. To this effect, Mr. Bhupesh Rathod/Sashikant Ganekar were

authorised to appoint advocates, issues notices through advocate, file

complaint, verifications on oath, appoint Constituent attorney to file

complaint in the court and attend all such affairs which may be needed in

the process of legal actions. What more could be said?

4 Credential Finance Ltd. v. State of Maharashtra 1998(3) Mh.L.J. 805.

13

25. The finding by the Courts below as to the lack of authorisation to

depose also, thus, stands nullified.

26. The description of the complainant with its full registered office

address is given at the inception itself except that the Managing

Director’s name appears first as acting on behalf of the Company. The

affidavit and the cross-examination in respect of the same during trial

supports the finding that the complaint had been filed by the Managing

Director on behalf of the Company. Thus, the format itself cannot be

said to be defective though it may not be perfect. The body of the

complaint need not be required to contain anything more in view of what

has been set out at the inception coupled with the copy of the Board

Resolution. There is no reason to otherwise annex a copy of the Board

Resolution if the complaint was not being filed by the appellant on behalf

of the Company.

27. In our view, one of the most material aspects is, as stated aforesaid,

that the signatures on the cheques were not denied. Neither was it

explained by way of an alternative story as to why the duly signed

cheques were handed over to the Company. There was no plea of any

fraud or misrepresentation. It does, thus, appear that faced with the

14

aforesaid position, the respondent only sought to take a technical plea

arising from the format of the complaint to evade his liability. There was

no requirement of a loan agreement to be executed separately as any

alternative nature of transaction was never stated.

Conclusion:

28. We are, thus, of the view that both the impugned orders of the trial

court and the High Court cannot be sustained and are required to be set

aside. The finding is, thus, reached that the complaint was properly

instituted and the respondent failed to disclose why he did not meet the

financial liability arising to a payee, who is a holder of a cheque in due

course.

29. We now turn to what would be the result of the aforesaid finding.

The complaint was instituted in July, 2006. Fifteen (15) years have

elapsed since then. The punishment prescribed for such an offence under

Section 138 of the NI Act is imprisonment for a term which may extend

to two years, or with fine which may extend to twice the amount of the

cheque, or with both. We are of the view that in the given scenario the

respondent should be sentenced with imprisonment for a term of one year

and with fine twice the amount of the cheque, i.e., Rs.3,20,000/-.

15

However, in view of passage of time, we provide that if the respondent

pays a further sum of Rs.1,60,000/- to the appellant, then the sentence

would stand suspended. The needful be done by the respondent within

two (2) months from today. The appellant would also be entitled to costs.

30. The appeal accordingly stands allowed in the aforesaid terms.

...……………………………J.

[Sanjay Kishan Kaul]

...……………………………J.

[M.M. Sundresh]

New Delhi.

November 10, 2021.

16

Arbitrator had committed an error in deciding the issue relating to 99 diamonds and one emerald ring for the 16 | P a g e following reasons. As has been rightly held by the High Court, the mandate for the Arbitrator is to decide whether said jewellery is stridhana property of the Respondent No. 1. A plain reading of the terms of reference No.(iii) would indicate the fact that the said jewellery being given to the Appellants in 1971 has been taken note of. Mere handing over of the jewellery to the Appellants in 1971, therefore, cannot be the reason for holding that the Appellants are entitled to retain the jewellery. The Arbitrator has concluded that 99 diamonds and one emerald ring, are in fact, stridhana property of Respondent No.1. That concludes point No.(iii) of the terms of reference. Point No.(iv) of the terms of reference relates to division of 99 diamonds and one emerald ring among 7 sharers only in case the Arbitrator comes to a conclusion that they are stridhana property. In the interim award, the Arbitrator heavily relied upon the award of 1971 and the fact of the 99 diamonds and one emerald ring being handed over to the Claimants, for the purpose of deciding that Respondent No. 1 is not entitled to claim the return of the said jewellery. The Arbitrator has committed a jurisdictional error by travelling beyond the terms of reference. Further, the Arbitrator has committed an error in permitting the Appellants to retain the jewellery. According to item No.(iv) of the terms of reference, the Arbitrator had to 17 | P a g e decide the entitlement of all the seven parties to equal shares in the event of finding that the jewellery is not stridhana property. Therefore, we approve the conclusion of the High Court by upholding the impugned judgment. The appeals are accordingly, dismissed.

 Non-Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal Nos. 6657-6658 of 2021

(Arising out of SLP (C) Nos. 30737-30738 of 2018

Pusapati Ashok Gajapathi Raju

& Anr. .... Appellant (s)

Versus

Pusapati Madhuri Gajapathi Raju

& Ors. ….Respondent(s)

W I T H

Civil Appeal Nos.6659-6660 of 2021

(Arising out of SLP (Civil) Nos. 12061-12062 of

2019)

 J U D G M E N T

L. NAGESWARA RAO, J.

Leave granted.

1. The Petition filed under Section 34 of the Arbitration and

Conciliation Act, 1996 (hereinafter referred to as “the Act”) by

Respondent No.1 was dismissed by the District Judge,

Vizianagaram and the interim award of the Arbitrator dated

26.05.2007 was upheld. The High Court partly allowed the

1 | P a g e

Appeals filed by the Respondents under Section 37 of the Act,

aggrieved by which the Appellants are before this Court.

2. Pusapati Vijayaram Gajapathi Raju succeeded to

Vizianagaram estate on 25.10.1937. He was married to Kusum

Madgoankar. They had three children namely, P. Ashok

Gajapathi Raju, P. Anand Gajapathi Raju and Smt. Vasireddi

Sunita Prasad. A public trust known as “MANSAS” was created

by P.V.G. Raju for education and charitable purposes. As the

karta of the family, P.V.G. Raju partitioned the properties of the

joint family in terms of the registered document dated

18.06.1960.

3. P.V.G. Raju divorced Kusum Madgoankar and married

Madhuri Gajapathi Raju, Respondent No.1 herein, in 1963. P.

Alaakanarayana Gajapathi Raju, P. Monish Gajapathi Raju and

Sudhani Devi were born to them. The dispute that arose

amongst the family members of P.V.G. Raju was referred to

Arbitration to Kumaraja of Bobbili who passed an award on

28.06.1971 allotting the properties to eight members of the

family. The said award was duly registered and made a decree

of court on 21.04.1972 in O.S. No.70 of 1971.

4. Thereafter, the Appellants filed a suit bearing OS No.

29/74 in the sub-court at Vizianagaram seeking division of

certain properties by metes and bounds. The suit was partly

2 | P a g e

decreed by the District Court on 31.10.1979. Against the

decree dated 31.10.1979, the Appellants filed an Appeal and

the Defendants in this suit filed certain cross-objections. On

24.07.1992, the High Court dismissed the Appeal filed by the

Appellants while partly allowing the cross-objections filed by

the Defendants in the suit. Not satisfied with the judgment of

the Hight Court, the Appellants filed SLP which was converted

as Civil Appeal No. 5251 of 1993.

5. During the pendency of the Civil Appeal No. 5251 of 1993

before this Court, Sri. PVG Raju passed away on 14.11.1995.

Post his demise, on 08.03.2000, all the parties filed a joint

application before this Court to refer the matter for arbitration.

The terms of reference in the application are as follows:

“(i) The entire subject matter of the appeal in dispute including

the properties that were partitioned in 1960 between late

P.V.G. Raju and his two sons Sri P. Anand Gajapathi Raju and Sri

P. Ashok Gajapathi Raju, and the lands given to Smt. Sunita

Prasad (daughter) and the properties that were divided in the

award proceedings in pursuance of the award of Kumararaja of

Bobbili of 1971.

(ii) All the shares with companies, certificates, bonds,

Government Securities, and all moveable and immoveable

properties including impartible properties (except those which

3 | P a g e

have been alienated by late P.V.G. Raju during his life time

before his death on 14.11.1995 subject to proof) will be

divided into seven equal shares and allot one such share to

each of the parties to the appeal;

(iii) The Arbitrator will also take into account 99 diamonds and

one emerald ring given to the applicants in 1971 and claimed

to be streedhana property of Smt. Madhuri V. Raju. The

Arbitrator will decide whether the aforesaid items are the

streedhana properties or not of Smt. Madhuri V. Raju;

(iv) In case the Arbitrator comes to the conclusion that the said

diamonds and emerald ring are not streedhana properties of

Smt. Madhuri V. Raju, all the parties to the appeal are entitled

to 1/7

th

 share equally in the said diamonds and emerald ring;

and

(v) The Arbitrator will not take into account the findings

recorded by the courts below.”

6. Mr. Justice S. Ranganathan, retired Supreme Court Judge

was appointed as the Sole Arbitrator by this Court on

28.03.2000 and the dispute with respect to the

aforementioned terms of reference were referred for arbitration

to him.

7. On 26.05.2007, the Arbitrator passed an interim award in

the following terms :

4 | P a g e

“ IX. CONCLUSIONS AND INTERIM AWARD

156. Having dealt with the various contentions raised

by the parties, the Tribunal proceeds to set out its

findings and conclusions:

(I) As the agreement of 08.03.2000 among all the

parties (embodied in the Supreme Court's order)

envisages the division of all the divisible properties

(movable and Impartible) of the family into seven equal

shares and allotment of one share to each of the

parties here, it is directed that the properties should be

so divided and allotted among the parties. However, it

will not follow that each sharer will be entitled to a one

seventh share in each asset as some items have been

divided differently in 1960 and 1971 and these

divisions have been accepted by us with slight

modification.

(2) The Tribunal has considered the partitions of 1960

and 1971 on their merits and is of opinion that the

allotments made at these partitions do not require to

be disturbed, except to a small extent specified against

the relevant Items and, necessarily, to the extent they

5 | P a g e

are affected by the death of PVG requiring a division of

the items allotted to his share at these partitions.

3) The lands described in Schedule I-A and II-B to II-H

have already been partitioned in 1960 and 1971.

Though the division is not in equal shares, there is no

need to disturb the earlier allotments and inequalities,

if any, will be made up in the final adjustments that will

require to be made. The division and allotments will be

made as per the terms of the 1960 partition deed and

the 1971 partition award as modified hereunder. As

these items already stand divided much earlier, they

do not really form part of this Award. However, the

properties listed in Schedule II-A, which had been

allotted to PVG in-1971, need to be divided equally

under the present sharers.

(4) The Tribunal is of opinion that one-fifth of the

extents of land in Schedule I-A and I-B claimed as set

apart for maintenance holders cannot on principle, be

excluded from partition although the sharers will be

responsible to meet the claims, if any, of maintenance

holders in equal shares and their liability in this regard

will be joint and several. It is, however, seen that even

6 | P a g e

in the plans and sketches drawn up by R-1 and

appended to the award, portions have been shown as

earmarked for the maintenance holders. With a view to

avoid unnecessary confusion, it is made clear that the

parties will be at liberty, in those cases where the

sketches have been approved, to adhere to these

plans, If they so desire, retain the earmarked portions

in favour of the maintenance holders and divide only

the balance among themselves in accordance with the

plans.

(5) The properties set out in Schedules 1 to IX will be

divided in the manner set out in the discussions under

the relevant schedules and keeping in mind the

findings contained therein. In doing so, help may be

taken from the plans appended to the award in respect

of some of the items, without, however, treating them

as conclusive. They may need modifications, if only for

including the areas earmarked for maintenance holders

in the land available for division if so opted for by the

parties.

(6) A very vital reservation is hereby made in regard to

the assets described in Schedules IA and IB. In paras

7 | P a g e

148 to 154, it has been pointed out that the provisions

of Urban Celling Act will override any partition

arrangement in respect of lands covered thereby. Thus,

while all the sharers may determine their right in

respect of these lands among item inter se, the

partitions directed hereby can only affect these pieces

of lands that. remain with the various members of the

family on the final outcome of the proceedings under

the land ceiling Act.

(7) The discussions in the award will show that out of

the items listed in the various schedules, several are

not available for various reasons such as item 3 of

Schedule I-A, Items 2 to 6 of Schedule 1-B and items 3

and 4 of Schedule 11-A. The half share of property In

Item 7 of Schedule II-A Is stated to have been disposed

of by him and it is agreed that this can be left out of

this award. This apart, the partition of the Item

Schedules IA and II-B to II-H have already been effected

by stamped and registered documents and are not

really under this document. Hence these items are not

effectively the subject matter of partition under this

document. So also, Items 2, 6 and 7 of Schedule V

which have been found to belong exclusively to RI and

8 | P a g e

the items set out in Schedule X (also in items 20 and

22 of Schedule V and item 16 of Schedule VI) have

been found to be not partible among all the sharers

and though the issue of their partibility has been

decided here, no partition of these items is being

directed under this document.

(8) The more difficult and cumbersome process is that

of carrying out the physical division envisaged herein.

This Is usually done by Commissioners appointed for

the purpose. However the Tribunal wishes to strongly

impress on the parties that all the further steps in this

regard will consume time, expense and energy which

can be avoided if parties sit across the table and select

specific items of the properties in each schedule. They

should be having a fair idea of the value of the

properties and, with mutual goodwill and give and take,

this should not be impossible. If this is done the whole

matter can be given a quietus and the entire

controversy settled finally and once for all. It is hoped

that the parties will see the wisdom of this course in

preference to the tortuous and prolonged course that

may be otherwise have to be pursued. It is a happy

circumstance that, in its efforts to evaluate the

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properties covered by the award, the Tribunal had

occasion to appoint three valuers agreed to by the

parties who have given detailed reports setting out

their opinions on the values of the several assets.

While these opinions may not be binding on the

sharers, they will certainly facilitate discussions among

the parties and enable them to agree upon the mutual

division in specie of the assets inter se, so as to avoid

the last resort of selling all or any of them and dividing

the proceeds.

(9) The Tribunal has come to the conclusion (vide para

112 et seq) that this Award requires to be stamped in

according with Article 12 of Schedule I-A to the Stamp

Act (as applicable to Delhi). The detailed evaluation of

the properties for purposes of Stamp Duty Is made In

Annexure R to the Award to which are appended as

Annexure S, T, U, V and W, the reports of the three

valuers appointed for the purpose. The parties were

apprised of the stamp duty payable and have

submitted by pro- rata contribution, nonjudicial stamp

papers of appropriate denomination on which this

Award is inscribed.

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(10) Since this is a partition proceeding with all seven

parties entitled to equal shares, the costs of these

proceedings (including fee of arbitrators, fee of valuers,

stamp duty payable) and any expenses that, may have

to be incurred for registration of the award, the

consequent mutation in public records and the like,

shall be borne equally by all the seven parties.

157. Though the points of controversy between the

parties have been decided by this award, it will be only

in the nature of an interim award as several further

determinations and the task of physical division of the

properties are yet to be considered. Appropriate orders

recording the final partition will still have to be made

thereafter and, in so doing, it will also be necessary to

consider the value of the properties allotted to each of

the sharers and direct such adjustments as may be

necessary monetarily or in specie. One more important

aspect to be considered at the time of the final

discussion will be that of the mesne profits, if any,

payable by the shares in respect of properties allotted

to other remaining in their possession. This will need a

detailed consideration from several angles, extents,

date, quantum etc. and will have to be considered

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later. For these purposes, the tribunal will resume its

sittings and pass appropriate orders after the parties

have had time to study the contents of this award.”

8. Aggrieved by interim award dated 26.05.2007,

Respondent No.1 filed a Petition under Section 34 of the Act

which was dismissed by the District Judge, Vizianagaram on

24.06.2013. The District Judge, Vizianagaram refused to

interfere with the award by rejecting the contention of

Respondent No.1 that the award suffers from patent illegality

and jurisdictional errors. Against the order of the District

Judge, Vizianagaram dated 24.06.2013, appeals were filed by

Respondent Nos. 1 to 3 under Section 37 of the Act before the

High Court.

9. The Appeals filed by the Respondents under Section 37 of

the Act were partly allowed by the High Court. The

Respondents contended before the High Court that the

Arbitrator committed an error in being guided by the 1960

partition and the 1971 award. It was argued by the

Respondents that the partition of the properties had to be

decided afresh without reference to the earlier 1960 partition

and the 1971 award in view of the terms of reference. The

High Court rejected the said submission of the Respondents by

holding that the Arbitrator was not solely guided by the earlier

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partition and the award. The High Court approved the finding

of the Arbitrator who referred to the earlier partition and the

award wherever he found that such arrangements were just

and equitable.

10. One of the terms of reference of the Arbitration relates to

99 diamonds and one emerald ring claimed by Respondent

No.1 to be stridhana property. The High Court set aside the

interim award of the Arbitrator to the extent that it held that

the Respondent No.1 had relinquished her rights over the 99

diamonds and one emerald ring and that the Appellants were

entitled to deal with the same in the manner in which they

wish. It is relevant to note that the Respondents have not

preferred any Appeal against this judgment of the High Court.

The Appellants have challenged the findings of the High Court

in respect of the 99 diamonds and one emerald ring.

Therefore, in these Appeals, this Court is concerned only with

the correctness of the interim award relating to terms of the

reference (iii) and (iv) which pertains to 99 diamonds and one

emerald ring.

11. The terms of reference relating to the 99 diamonds and

one emerald ring are as under:

“(iii) The Arbitrator will also take into account 99

diamonds and one emerald ring given to the applicants

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in 1971 and claimed to be streedhana property of Smt.

Madhuri V. Raju. The Arbitrator will decide whether the

aforesaid items are the streedhana properties or not of

Smt. Madhuri V. Raju;

(iv) In case the Arbitrator comes to the conclusion that

the said diamonds and emerald ring are not

streedhana properties of Smt. Madhuri V. Raju, all the

parties to the appeal are entitled to 1/7

th

 share equally

in the said diamonds and emerald ring;”

12. In the interim award, the Arbitrator held that the 99

diamonds and one emerald ring were initially given to

Respondent No.1 by P.V.G. Raju as stridhana at the time of

engagement and marriage. The Arbitrator relied upon the

written statement filed by P.V.G. Raju in O.S. No.29 of 1974, the

evidence of Respondent No.1 in the said suit as well as the

affidavit filed by Respondent No.1 before him to come to a

conclusion that 99 diamonds and one emerald ring were

initially given to her as stridhana property. However, the

Arbitrator observed that these 99 diamonds and one emerald

ring were given by the Respondent No. 1 to the Claimants

(Appellant herein) in the year 1971 pursuant to the 1971

award for partition. The Arbitrator took note of the fact that

prior to the year 1971, the stridhana property was shown in

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the wealth tax returns by P.V.G. Raju. There is no reference to

the 99 diamonds and one emerald ring in the wealth tax

returns of P.V.G. Raju after 1971. The Appellants claimed

before the Arbitrator that 99 diamonds and one emerald ring

were voluntarily given by Respondent No. 1 to them. Whereas,

Respondent No.1 pleaded that she was coerced to part with 99

diamonds and one emerald ring. The request of Respondent

No.1 that the said stridhana property should be returned to her

was not accepted by the Arbitrator on the ground that the

arrangement made in 1971 cannot be disturbed. The

Arbitrator further recorded the statement of Claimant No.1 that

his wife Uma had broken the miniature studded with gems and

made jewellery out of it and that he had delivered the

diamonds to his estranged wife. The Arbitrator also took note

of the submission on behalf of the Claimant No.2 that he has

made a chain out of the 99 diamonds and presented it to his

wife and Claimant No.3 that he had sold the diamonds which

fell to his share. Finally, the Arbitrator held that Respondent

No.1 had validly relinquished the stridhana property which was

divided amongst all the shareholders and she cannot be

permitted to seek return of the jewellery.

13. While setting aside the finding of the Arbitrator regarding

the stridhana property, the High Court was of the opinion that

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the Arbitrator committed a jurisdictional error in his conclusion

about the right of Respondent No.1 over the 99 diamonds and

one emerald ring. According to the High Court, the Arbitrator

could not have rejected the plea of Respondent No.1,

especially after finding that the 99 diamonds and one emerald

ring was stridhana property of the Respondent No. 1. The

mandate of the Arbitrator was to decide whether the said

jewellery is stridhana property and only in case the Arbitrator

found that the said jewellery is not stridhana property, the

Arbitrator shall decide the entitlement of the parties for the

equal share. The High Court found fault with the interim award

on the ground that the Arbitrator traversed beyond the terms

of reference. If the said jewellery is held to be the stridhana

property of Respondent No. 1, the question of deciding on the

division of the property due to the change in the nature of the

properties subsequently does not arise. The High Court further

observed that the award passed in 1971 is not final and

binding. If it was binding, the dispute relating to said jewellery

being stridhana property would not have been referred to the

Arbitrator.

14. We are in agreement with the judgment of the High Court

that the Arbitrator had committed an error in deciding the

issue relating to 99 diamonds and one emerald ring for the

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following reasons. As has been rightly held by the High Court,

the mandate for the Arbitrator is to decide whether said

jewellery is stridhana property of the Respondent No. 1. A

plain reading of the terms of reference No.(iii) would indicate

the fact that the said jewellery being given to the Appellants in

1971 has been taken note of. Mere handing over of the

jewellery to the Appellants in 1971, therefore, cannot be the

reason for holding that the Appellants are entitled to retain the

jewellery. The Arbitrator has concluded that 99 diamonds and

one emerald ring, are in fact, stridhana property of Respondent

No.1. That concludes point No.(iii) of the terms of reference.

Point No.(iv) of the terms of reference relates to division of 99

diamonds and one emerald ring among 7 sharers only in case

the Arbitrator comes to a conclusion that they are stridhana

property. In the interim award, the Arbitrator heavily relied

upon the award of 1971 and the fact of the 99 diamonds and

one emerald ring being handed over to the Claimants, for the

purpose of deciding that Respondent No. 1 is not entitled to

claim the return of the said jewellery. The Arbitrator has

committed a jurisdictional error by travelling beyond the terms

of reference. Further, the Arbitrator has committed an error in

permitting the Appellants to retain the jewellery. According to

item No.(iv) of the terms of reference, the Arbitrator had to

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decide the entitlement of all the seven parties to equal shares

in the event of finding that the jewellery is not stridhana

property. Therefore, we approve the conclusion of the High

Court by upholding the impugned judgment. The appeals are

accordingly, dismissed.

15. We are informed by the learned counsel appearing for the

parties that an Arbitrator has to be appointed to pass the final

award. It is stated that after the resignation of Justice S.

Ranganathan (Retd.), Justice P. Lakshman Reddy (Retd.) was

appointed as an Arbitrator by the High Court. However, in

September 2019, Justice P. Lakshman Reddy (Retd.) has been

appointed as Lokayukta. In light of the above, we appoint Mr.

Justice Kurian Joseph to act as a sole Arbitrator and to continue

the arbitration proceedings and pass a final award in S.R.A.T.

No. 2/2000 pending between the parties. As the dispute has

been pending for a number of years, we request the Arbitrator

to expedite and complete the proceedings at the earliest.

 …….................................J.

 [ L. NAGESWARA RAO ]

........................J.

 [ B.R. GAVAI ]

New Delhi,

November 09, 2021.

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