OM PRAKASH BHARTIA Vs. NIKUNJ LOHIA

JUDGEMENT

(1.) This is a suit by Shri Om Prakash Bhartia under Section 69 of the Contract Act, 1872 for the recovery of a sum of Rs.47,39,000.00 besides pendentelite and future interest @ 18% per annum. The facts as disclosed from the plaint are as under :- The plaintiff alongwith Shri Hari Prasad Lohia, Shri Narayan Prasad Garodia his father and brother Shri Hari Charan Garodia and Shri Bal Kishan were jointly running the following three companies:-

(2.) The East India Manufacturing Company Ltd. had certain powerloom units, attached to it by the name of Rajyashree Textiles and Prem Textiles. Initially the business was being jointly run by all the aforesaid parties but later it came to be controlled and managed by Shri Hari Prasad Lohia and Shri Narayan Prasad Garodia. It so happened that in the year 1979 disputes and differences arose between the families which were earlier managing the business. Hence, in order to resolve the same an Agreement dated 2.12.79 was signed between the parties. The plaintiff however expressed his desire to disassociate himself from the rest of the group and sought division of the assets. By virtue of the Agreement dated 2.12.79 it was agreed between the parties to refer all their disputes and differences with respect to the control and / or management of the three companies mentioned hereinabove, as well as their rights, title and interest in the power loom units etc., to the joint arbitration initially of Shri Shyam Sunder Kejriwal and Shri Ajay Kumar Himatsingka. Subsequently, with the consent of the parties these Arbitrators were replaced by Shri Nathmal Himatsingka and Shri Pramod Khaitan. At the time of signing of the Agreement dated 2.12.79 Hari Prasad Lohia and Narayan Prasad Garodia were having possession and control over the management and affairs of the three companies and the power loom units. They therefore executed indemnity bond dated 25.9.80 in favour of the plaintiff and his family members agreeing to indemnify them with respect to all liabilities including liabilities prior to 27.4.1980 arising from the operation of business of Prem Textiles and Rajyashree Textiles. As agreed between the parties the disputes between them were referred to arbitration which culminated into an award dated 3.10.83 whereby it was declared that the business of M/s Prem Textiles, Rajyashree Textiles and other companies/ factories alongwith all their assets and liabilities shall be deemed to have been transferred to Shri Hari Prasad Lohia and Shri Narayan Prasad Garodia who were referred to as the first group. It was also declared in the award that the first group would keep the second group in which the plaintiff came to be included, fully indemnified and harmless in all respects as to every act, deed or thing done by or on behalf of the first group or its servants and / or agents in respect of said several business of the second group since 27.4.80.

(3.) It was further declared that the first group shall keep the second group or any member or members thereof who had given personal guranatees in favour of the bankers in the above-named powerloom units for extending credit facilities, fully indemnified and harmless against all and every such liability. It was furthermore declared that the first group shall be responsible for all the court cases, present and future and shall keep the second party or its members harmless and indemnified in all respects. The award so rendered dated 3.10.83 was decreed by the High Court of Calcutta by decree dated 21.9.84 which was upheld by the Appeal Court of said High Court vide its order/ judgment dated 12.4.91 and was also confirmed by the Supreme Court of India vide its order dated 3.11.92.