DEEPAK MITRA Vs. DISTRICT JUDGE ALLAHABAD

JUDGEMENT

(1.) THE core question involved in the present writ petition is whether in a case in which a dispute between the parties has been referred for decision by an Arbitral Tribunal appointed by the High Court, interim order which is termed as an 'interim award' passed by it with a view to ascertain the feasibility viability of the proposal for vertical division of immovable and moveable properties and asset of the two private companies equally, after ascertaining the wishes of the shareholders and ultimately holding that the division is not practicably possible, can be made subject-matter of challenge by initiating proceedings u/s. 34 of the Arbitration and Conciliation Act, 1996 hereinafter referred to as 'the Act') before the District Judge, Allahabad, being the principal Civil Court of original jurisdiction in the district. It is in the wake of this controversial question that the petitioner-Deepak Mitra has prayed for a writ of prohibition to prohibit District Judge, Allahabad from proceeding with the arbitration case No. 18 of 1998 Ashok Mitra v. Smt. Sucharitra Mitra and for a direction in the nature of writ of certiorari to quash the orders dated 19-3-1999 and 9-10-1998 passed by him in the aforesaid proceeding.

(2.) SHORN of all superfluities, the facts of the case are that late K. M. Mitra and his brother-in-law B. N. Ghosh along with some other persons floated two companies in the year 1953 for the purposes of publishing and printing work respectively- (1) Mitra Prakashan Private Ltd. , and (2) Maya Press Private Ltd. , which in course of time acquired name and fame. Late K. M. Mitra died leaving behind his widow Smt. Nandrani Mitra, his five sons, namely, Alok Mitra (respondent No. 6): Ashok Mitra (respondent No. 2); Deepak Mitra (petitioner); Parvendra Mitra (whose whereabouts are not known as he has not heard of for a considerable long time); Manmohan Mitra (respondent No. 3) and a daughter Smt. Madhurima Mitra (now Ghosh) respondent No. 9. B. N. Ghosh also died leaving behind his widow Smt. Amiya Ghosh respondent No. 11. After the death of K. M. Mitra and B. N. Ghosh, Smt. Nandrani Mitra became the Chairman of the Mitra Prakashan Private Limited. So long she was alive, the disputes between her sons did not come to surface. She died on 1-9-1993 and thereafter, a spate of litigation followed and in the litigative zeal of the warring family, Smt. Illa Mitra, respondent No. 7; Smt. Sucharita Mitra, respondent No. 4; Smt. Deepika Mitra, respondent No. 8 and Smt. Taposi Mitra, respondent No. 5 respectively wives of Alok Mitra, Ashok Mitra, Deepak Mitra and Manmohan Mitra also joined. Ashok Mitra, respondent No. 2 invoked the testamentary jurisdiction of this Court by filing case No. 6 of 1996 in which a challenge was made to the alleged Will of later Smt. Nandrani Mitra. As an offshoot, a chain of writ petitions came to be filed, besides lodging of civil suit Nos. 176 of 1996; 272 of 1996 and 233 of 1996. Company Law Board was also approached. In the backdrop of all pervasive litigation between the parties, a good sense and counselling appears to have prevailed and with the whole-hearted consent of the parties, an order was passed by a Division Bench of this Court on 27-11-1995 in writ petition No. 35721 of 1996, for the resolution of their entire dispute including in relation to Maya Press Private Limited, which was subject- matter of not only the said writ petition but also other disputes pending in different Courts, including grant of an interim relief, which may be desired by one or the other parties, through arbitration of Mr. Justice Amitav Banerjee a retired Chief Justice of this Court. Accordingly writ petition was disposed of with the following observations:". . . . . We dispose of this writ petition, accepting the aforementioned proposals and direct the parties, who are before us through their respective learned Counsel to appear before Mr. Justice Banerjee, within one week from today and thereafter Mr. Justice Banerjee will proceed in the manner which may be laid down by him. We also put on record that both learned Counsel agree that the earlier arrangements which had been arrived at between the parties shall continue and in the event of any dispute in that regard and other connected disputes it will be open for them to move the Arbitrator for passing appropriate orders. It is also agreed that all the expenses of the arbitration will be shared by the companies in equal proportion. Even though it is needless, but since it is insisted, we clarify that all the four directors of the petitioner No. 1 will continue to act as such unless otherwise directed by the Arbitrator. " Earlier a writ petition No. 17757 of 1996 was filed by respondent No. 2 Ashok Mitra which was finally disposed of on 22-5-1996 with an ex parte order and direction that until disposal of the injunction application, status quo with regard to 662 shares of late Smt. Nandrani Mitra in the Mitra Prakashan Limited as on the date of her death shall be maintained. This order was challenged before the Apex Court by Mitra Prakashan Limited through Alok Mitra by filing Special Leave Petition No. 13143 of 1996. The Hon'ble Supreme Court disposed of the Special Leave Petition by making the following observations:- "in CMWP No. 35721/96 by order dated November 27, 1996 High Court has referred all the disputes to be resolved by an arbitrator, Justice Amitav Banerji former Chief Justice of Allahabad High Court. In this view of the matter the dispute in this case also stands referred to and be decided by him. The status quo could continue until the Arbitrator decides the dispute. The SLP is disposed of. " In view of the above orders passed by the Court as well as the Supreme Court, Mr. Justice Amitav Banerji, as the sole Arbitrator came in seisin of the entire gamut of the disputes between the parties with regard to the two companies named above. The parties submitted to the arbitral proceedings, during the course of the proceedings, two suggestions, it appears, came to be made by the parties firstly, there was a plea to vertically divide the immovable and moveable assets of the two companies equally, or as far as possible equally, including the press building etc. , after ascertaining the value of each item and, the second to hold Annual General Meetings of the shareholders of the two companies to ascertain their wishes in respect of the division of the properties in two units. On 11-4-1998, two separate and distinct orders were passed by the Arbitral Tribunal. One of the orders was in respect of the decision on issue No. 2 which related to the question as to who are the shareholders of the two companies and what is the extent of their share holding. By an elaborate order, the extent of the shares was determined and the final position, which emerged about the share holding of the parties in the two companies, is described in the order. There has been no challenge to this order. The order is pertaining to the suggestions made for the division/partition of the properties of the two companies. For this purpose, by order dated 11-4-1998, the Arbitral Tribunal directed for holding of extraordinary General Meetings of each of the two companies on 16th May, 1998 and Maj. General M. N. Rawat, PVSM (retired) was nominated as Chairman of the two meetings. The order dated 11-4-1998 passed by the Arbitral Tribunal for convening the extraordinary General Meetings came to be challenged in Civil Misc. Writ No. 17021 of 1998 filed by Smt. Sucharita Mitra, respondent No. 4. This writ petition along with one more writ petition was finally disposed of on 15-5-1998 by a Division Bench of this Court with the following observations: "both the writ petitions are accordingly disposed of finally with a direction that learned Arbitrator and the Chairman nominated by him may provide the shareholders a concrete proposal of various modes of partition of the assets and properties for consideration in the meeting. It is not disputed that the meeting has already been postponed for 23-5-1998. Such agenda thus shall be supplied to the shareholders well within time so that they may have sufficient opportunity to consider the same. There will be no order as to costs. " Pursuant to the order dated 11-4-1998 passed by Arbitrator, the meetings of the shareholders of the two companies were convened by the Chairman Maj. Gen. Rawat and a report dated 23-6-1998 was submitted by him to the Arbitrator intimating that the opinion poll was against the division of the properties of the two companies. An application was moved before the poll by Ashok Mitra and Manmohan Mitra with the prayer that no person be permitted to exercise his voting rights on the strength of the shares devolved upon him/her as successor of late Nandrani Mitra. This application was forwarded with the result of the poll by the Chairman to the Arbitral Tribunal, which passed the following order on 27th July 1998 on the result of the opinion poll as well as the application moved by the above named two brothers: "since the shares held by Smt. Nandrani Mitra could only go to her husband's successors, the beneficiaries were the five sons, a daughter and the widow. Further, on the death of the widow, her share would devolve on her five sons and the daughter in equal measure. Consequently, even if these shares are excluded from the total votes cast on the poll, the result would still be the same against the proposal for partition. " It is this order which is the bone of contention and has been challenged by Ashok Mitra and Manmohan Mitra-respondent Nos. 2 and 3, by filing an arbitration case No. 18 of 1998 u/s. 34 of the Act, before the District Judge, Allahabad on the grounds that the said order has been passed in utter disregard of various orders passed by this Court as well as the Apex Court; it demonstrates total non-application of mind and is not informed by reasons; it is laconic and perfunctory and has been passed with a pre- meditated and prejudiced mind. Learned District Judge, while admitting the case under S. 34 of the Act by order dated 9-10-1998 issued notices to the opposite parties and passed an interim order to the following effect: "i have gone through the various orders passed by the Hon'ble High Court and the Supreme Court regarding the shares of late Smt. Nandrani Mitra. I, therefore, direct that the declaration of the result on the basis of the voting in the extraordinary meeting of 10-10-1998 shall remain stayed. (Till 17-10-1998 for which notices were issued ). " This interim order has been extended time and again primarily for the reason that the case was not ripe for hearing on account of non-service on all the opposite parties. The last order has been passed on 19- 3-1999 by which the case was fixed for hearing by learned District Judge on 22-4-1999.