REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.    6753       OF 2008 [Arising out of SLP (C ) No.3367/2007]

Narayan Prasad Lohia … Appellant

Versus

Nikunj Kumar Lohia … Respondent

J U D G M E N T

AFTAB ALAM,J.

1. Heard counsel for the parties.

2. Leave granted  

3. This appeal is directed against the order dated November 14, 2006 by

which  a  Division  Bench  of  the  Calcutta  High  Court  allowed  the  appeal

preferred by the respondent  and set  aside the  order  dated May 16,  2006

passed by a Single Judge of the High Court on an application for execution,

arising from an arbitration award, directing the parties  to  maintain status

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quo. The Division Bench was apparently fully conversant with the relevant

facts and hence, it allowed the appeal by a brief order without stating the

basic  facts  of  the  case.  It  was  thus  left  open to  the appellant  to  take us

through  the  facts  of  the  case  and  in  turn  it  falls  upon  us  to  uphold  the

decision of the High Court by stating the relevant facts.  

4. This  appeal  arises  from an  arbitration  award  that  was  intended  to

settle  a  family  dispute  but  which  apparently  failed  to  satisfy  all  the

contending  parties.  Objections  against  the  award  were  filed  in  the  High

Court and a protracted litigation commenced. In course of the long drawn

proceedings, it seems the appellant tried to resolve his disputes with the two

objectors not at the same time but by dealing with them separately and one

by one. In that process some slips were made here and there and as a result

the whole thing comes unstuck for the appellant.  

5. The relevant facts of the case may, in brief, be stated as follows:  

6. An arbitration  award  dated  October  6,  1996  confirmed,  subject  to

some  modifications,  a  family  settlement  under  the  memorandum  of

understanding dated June 24, 1996 between five parties. The parties to the

award were (I) Bal Govind Lohia (II) Narayan Prasad Lohia (the appellant)

(III)  Nikunj  Kumar  Lohia  (the  respondent)  (IV)  Smt.  G.  Lath  and  (V)

Mukund Lath. In furtherance of the award and for its implementation the

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appellant and the respondent entered into a memorandum of understanding

dated May 4, 1997. Nevertheless, objections to the award were filed in the

Calcutta  High  Court  by  the  respondent  Nikunj  Kumar  Lohia  (AP

No.406/1997) and Bal Govind Lohia (AP No.53/1998). A single judge of

the  High  Court  allowed  both  the  objection  cases  and  set  aside  the

arbitrators’ award. The main judgment was passed on November 17, 1998 in

AP No. 53 of 1998 filed by Bal Govind Lohia. The objection filed by the

respondent (AP No. 406 of 1997) too was allowed by another order passed

on  the  same day  following  the  judgment  passed  in  AP No.53  of  1998.

Against the judgment and orders passed by the single judge the appellant

filed two appeals before the division bench of the Court, APO No.620 of

1999 arising out of AP No.53 of 1998 (Bal Govind’s objection) and APO

No.619  of  1999  arising  from  AP  No.406  of  1997  (the  respondent’s

objection).  Both the appeals  were dismissed by the division bench. Once

again the main judgment dated May 18, 2000 was passed in APO No.620 of

1999 following which APO No.619 of 1992 was dismissed by a brief order

dated July 14, 2000.

7.  The  appellant  brought  the  matter  to  this  Court  in  appeals;  Civil

Appeal No.1382 of 2002 was filed against the division bench judgment and

order  dated  May  18,  2000  in  APO  No.620  of  1999  (arising  from  Bal

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Govind’s objection) and Civil Appeal No.1384 of 2002 was filed against the

order dated July 14, 2000 dismissing APO No.619 of 1999 (relating to the

respondents  objection).  The two appeals were heard in this  Court in two

stages. One of the grounds on which the single judge of the High Court had

held the award as bad was that it was made by a panel of two arbitrators. It

was contended before the High Court that section 10 of the Arbitration and

Conciliation  Act,  1996  provides  against  the  number  of  arbitrators  being

even.  The  single  judge  upheld  this  objection,  amongst  others,  and,

accordingly, set aside the award. The division bench dismissed the appeals

on this short point. Since the appeals before this Court involved the question

of interpretation of section 10 of the Arbitration and Conciliation Act those

were first  laid  before a bench of three judges.  The three-Judge bench by

judgment and order dated February 20, 2002 in Civil  Appeal No.1382 of

2002, (2002) 3 SCC 572 held that section 10 undoubtedly provides that the

number of arbitrators should not be even but the provision was not ‘non-

derogable’. The Court further observed that since Nikunj Kumar Lohia (the

present respondent) and Bal Govind Lohia did not raise any objection to the

composition of the Arbitral Tribunal as provided in section 16 they must be

deemed to have waived their right to object. The three -Judge bench held

that  the  judgments  of  the  single  judge  and  the  division  bench  on  the

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question of section 10 were unsustainable  and,  accordingly, set aside the

judgments  of  the  High  Court  on  that  issue.  For  consideration  of  other

aspects, the appeals were directed to be listed before a bench of two Judges.

As directed, the two appeals came up before a bench of two judges and were

finally disposed of by judgment and order dated January 28, 2003, (2003) 2

SCC 251.  The Court noted that the judgment of the single judge of the High

Court,  setting aside the award, was based on as many as six findings. In

appeal, however, the division bench had dealt with only two questions and,

deciding them in favour of the objectors, had dismissed the appeal without

going into the other questions/findings. This Court, accordingly, disposed of

the two appeals with the following directions:

“9.  Accordingly,  we dispose of  these  appeals  with  the direction that the matters be remitted to the High Court for the division bench to consider the other grounds on which the learned Single Judge had set aside the award by its judgment and order dated 17-11-1998, which have not  been  considered  by  the  Division  Bench  in  its judgment and order dated 18-5-2000. These appeals are disposed  of  accordingly.  There  will  be  no  order  as  to costs.”  

8. Thus  the  matter  came  back  to  the  High  Court.   At  this  stage,  it

appears that the appellant was able to resolve some of his disputes with the

respondent who addressed to him a letter dated August 9, 2003 stating that

though  he  had  earlier  filed  an  appeal  (sic  objection)  he  was  no  longer

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interested in contesting the proceedings. The respondent addressed another

letter dated August 23, 2003 to the Registrar, Original Side, Calcutta High

Court.  In  this  letter  he  reiterated  that  he  was  no  longer  interested  in

contesting the two appeals (APO Nos.619 and 620 of 1999) preferred by

Naryan  Prasad  Lohia  against  him and  others.  He  further  stated  that  his

objection (AP No.406 of 1997) against the arbitrators’ award may also be

treated as dismissed as withdrawn ‘inasmuch as the award already passed

was agreed between the parties by the joint Arbitrators,  were duly given

effect to, implemented, as also by consent of the parties’. He further stated

that he had no concern with the other objection against the award filed by

Bal Govind Lohia (AP No.53 of 1998).  He requested the Registrar to put up

the letter before the division bench before whom the appeal was pending for

hearing.  On August 25, 2003 the respondent also filed an affidavit to the

same effect as stated in the letters to the appellant and the Registrar of the

High Court.  In  view of the  development  the  division bench of  the  High

Court before which the two appeals were pending on remand by this Court

passed an order on August 27, 2003 the relevant extract from which is as

follows:

“In the  said letter,  as  also  in  the affidavit  affirmed by Nikunj Kumar Lohia, it has been stated by him that he was no longer interested in contesting the matter and that he did not wish to press the application for setting aside

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the award, being AP No.406 of 1997 and that the same be treated as dismissed as withdrawn.  

“In  view  of  the  said  communication  from  Sri Nikunj Kumar Lohia and the affidavit affirmed by him, we record in both the appeals that Nikunj Kumar Lohia is no longer interested in contesting the appeals. Let the affidavit on behalf of the appellant (sic respondent) and filed in Court today be kept with the record.  

“Let  these  appeals  stand  over  till  1st September, 2003 at 2:00 P.M. for further hearing.”   

9. Finally, while disposing of the two appeals  by judgment and order

dated February 28, 2005 the division bench noted as follows:

“At  the  very  outset  we  were  informed  that  as  far  as A.P.O. No. 619 was concerned, the respondent No.1, Sri Nikunj Kumar Lohia, who had filed the application for setting aside the Award, had in a letter dated 23rd August, 2003,  to  the  Registrar,  Original  Side  expressed  his intention  not  to  contest  the  appeal.  Accordingly,  only A.P.O.  NO.  620  of  1999,  which  arose  out  of  an application filed by Sri. Bal Govind Lohia, was taken up for consideration though the case made out in respect of both the matters were identical.”  

10.  APO No.620 that  arose out  of  the  objection  filed by Bal  Govind

Lohia was allowed and the judgment of the single judge dated November

17, 1998 upsetting the award was set aside.

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11. Against  the decision of the division bench Bal Govind Lohia once

again came to this Court in SLP (Civil) No.8954 of 2005 giving rise to Civil

Appeal No.2477 of 2006.

12. While  SLP No.8954  of  2005  was pending  before  this  Court  some

further development took place in the High Court between the respondent

and the appellant. The respondent filed an application before the High Court

in the disposed of appeals stating that the arbitrators award was based on

and  it  confirmed,  subject  to  some  modifications,  the  memorandum  of

understanding between the parties dated June 24, 1996 but in the operative

portion of the division bench decision, upholding the award, the date of the

memorandum of understanding was stated as May 4, 1997. The respondent

made  the  prayer  before  the  High  Court  to  correct  the  date  of  the

memorandum of understanding as June 24, 1996.

13.  The  High  Court  observed  that  the  appeals  were  disposed  of  and

against its decision one of the parties, (Bal Govind Lohia ) had filed an SLP

before the Supreme Court in which one of the grounds taken was that the

arbitration award was referable to the memorandum of understanding dated

June 24, 2006 and not May 4, 1997. The matter being pending before this

Court  the  High  Court  declined  to  entertain  the  application  filed  by  the

respondent and disposed it of by order dated June 27, 2005. Against that

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order the respondent came to this Court in  Nikunj Kumar Lohia   vs.  Bal

Govind  Lohia  & Ors.  (SLP  No.  (Civil)  8176  of  2006).   The  SLP  was

dismissed with certain observations by order dated April 21, 2006 which is

as follows:  

“The only grievance made by the learned senior counsel appearing  for  the  petitioner  is  that  the  date  of  the Memorandum of Understanding annexed to  the Award has been erroneously shown as “4th May, 1997” in place of “24th June, 1996”. The learned counsel states that the petitioner  has  no  grievance  whatsoever  against  the Award other than this grievance and that he had moved an application under Section 152 Civil Procedure Code for  correction  of  the  date  of  the  Memorandum  of Understanding annexed to the Award, but his application was  dismissed  on  the  ground  of  pendency  of  Special Leave Petition (C) No. 8954/2005.

“If this is the only grievance, we see no reason to interfere  in  the  present  petition.  The  Special  Leave Petition  is  dismissed  with  liberty  to  the  petitioner  to move the  High Court  after  Special  Leave  Petition  (C) NO. 8954/2005 is disposed of.”   

14. Finally, the appeal  filed by Bal Govind Lohia was allowed by this

Court by judgment and order dated May 5, 2006. The Court noted that the

earlier order of remand by this Court had expressly asked the division bench

of the High Court to consider the several grounds on which the single judge

had allowed the objection and upset the award but instead of considering the

grounds  relied  upon  by the  single  judge  the  division  bench  allowed  the

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appeal on some other aspect of the matter. This Court, therefore, once again

remanded the matter to the High Court with the following directions:

“The impugned Judgment of the Division Bench is  set aside and A.P.O No. 620 of 1999 is remitted to the High Court.  The  Division  bench shall  now hear  A.P.O.  No. 620  of  1999  in  the  light  of  the  observations  made  in Civil  Appeal No. 1382 of 2002 by the order dated 28th January, 2003 and dispose it of in accordance with law.  

“It shall be open to all the parties, who are entitled to be heard,  to raise all  contentions which are open to them in law. The appeal is accordingly, allowed. There will be no order as to costs.”  

15. It doesn’t need to be stated that as a consequence of the setting aside

of the order of the division bench, the order of the single judge, upsetting

the award, got revived.   

16. The matter rested at this stage when the appellant filed an execution

application  only  against  the  present  respondent.  On  this  application  the

single  judge  of  the  High  Court  passed  the  order  dated  May  16,  2006

directing  the  parties  to  maintain  status  quo  during  the  pendency  of  the

appeal  before the division bench on remand by the Supreme Court.  Against

this order the respondent filed an appeal before the division bench which by

order dated June 26, 2006 stayed the interim direction given by the single

judge.

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17.  At about the same time the appellant was able to settle his dispute,

outside the court, with Bal Govind Lohia.  The division bench of the High

Court  was  informed  about  the  settlement  on  which  Bal  Govind  Lohia’s

appeal pending on remand by this Court was finally disposed of by passing

the following order:  

“Both  the  Learned  Advocates  appearing  for  the respective parties, namely, the appellant and Respondent No.1submit that out of the Court the parties have already settled  the  matter  and  accordingly  this  Appeal  at  the present moment has become infructuous.

“Having regard to such state of affairs, the appeal stands dismissed as it has become infrutuous.

                                                                        “All parties concerned are to act on a signed copy of the minutes of this order on the usual undertaking.”         

                                                                         (emphasis added)

18. It is thus to be seen that though the appellant and Bal Govind Lohia

were able to arrive at a settlement, the terms in which the order was passed,

dismissing  the  appeal  as  infructuous,  clearly  left  the  order  of  the  single

judge,  upsetting  the  award,  subsisting  and  undisturbed.  Hence,  when  the

respondent’s appeal against the order directing to maintain status quo came

up for final disposal the division bench rightly held that their was no award

in existence and their was no question of putting a non-existent award into

execution.  The  division  bench  further  observed  that  since  there  was  no

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award, the order passed by the single judge in execution had to be set aside;

it did so and allowed the appeal.

19. In the facts and circumstances of the case as narrated above the order

of the  division bench brought  under appeal  is  quite  unexceptionable  and

calls for no interference. The filing of the appeal against this order before

this Court is wholly misconceived. The proper course for the appellant was

perhaps to file a review petition for modification of the order dated June 28,

2006 by which APO No.620 of 1999 was dismissed by the division bench of

the High Court as infructuous.  

20. On hearing counsel for the parties and on a careful consideration of

the materials on record we find no substance or merit in this appeal. It is,

accordingly, dismissed but with no order as to costs.  

………………………………J.

[Tarun Chatterjee]

…………….………………..J.

[Aftab Alam]

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New Delhi,

November 25, 2008.

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