Date of Order:
July 25, 2023
Bench:
Chief Justice of India [Dr Dhananjaya Y Chandrachud]
Justice [Pardiwala]
Justice [Manoj Misra]
Parties:
Vinod Kumar Sachdeva (Dead) Thr Lrs
Appellant(s)
Versus
Ashok Kumar Sachdeva & Ors
Respondent(s)
SUBJECT
- The appeals stem from a 1 August 2017 judgement of a Single Judge of the High Court of Punjab and Haryana in CR Nos 2819 and 2820 of 2017. Both petitions involving Article 227 of the Constitution arose from orders issued by the Civil Judge (Junior Division), Amritsar, allowing applications under Section 8 of the Arbitration and Conciliation Act 19961 in two suits instituted by the first respondent, Case No 64/2438/2014 and Civil Suit No 28/53/2015.
- The MoU outlines family units and concerns, but the reference to arbitration under Section 8 was incorrect. The court discarded the High Court’s decision dismissing the first respondent’s applications.
IMPORTANT PROVISIONS
- Memorandum of Understanding
OVERVIEW
- The appellant and first respondent, brothers, were conducting business under Sachdeva and Sons’ name. They purchased properties in the name of the appellant and his deceased father, which were later transferred to a concern. A Memorandum of Understanding was reached in September 2010, deciding to liquidate joint family properties to repay business liabilities.
ARGUMENTS ADVANCED BY THE APPELLANT
- The MoU dated September 14, 2010 between the appellant and the first respondent is in force. The appellant institutes two suits, with the first respondent as the first defendant and Sachdeva and Sons Industries Private Limited as the second. Relief is sought against Canara Bank, seeking a permanent injunction to prevent the alienation of land and prevent Canara Bank from disbursing loans or financing in their names.
ARGUMENTS ADVANCED BY THE RESPONDENT
- The first respondent filed applications under Section 8 of the 1996 Act, but the trial court dismissed them. The High Court set aside the trial court’s judgment and directed arbitration under Section 8 of the 1996 Act. The dispute now goes to this Court.
JUDGEMENT ANALYSIS
- The MoU indicates the Sachdeva family, including both appellant and first respondent, operates multiple companies, partnership firms, and proprietorships under joint ownership.
- The MoU describes family units and concerns, but the reference to arbitration under Section 8 was in error. The MoU was executed between the appellant and the first respondent, and non-family shareholdings cannot be bound by the terms.
- The court set aside the High Court’s Single Judge’s judgment and order from 1 August 2017, dismissing first respondent’s applications under Section 8 of the 1996 Act.
