MR. JUSTICE S.M.SUBRAMANIAM C.M.A.Nos.4465, 4467 to 4469 of 2019 And C.M.P.Nos.25291, 25293, 25294 and 25295 of 2019 1.Mr.V.G.Santhosam 2.Mr.V.G.P.Ravidas 3.Mr.V.G.P.Rajadas arbitration order
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 24-02-2020
CORAM
THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM
C.M.A.Nos.4465, 4467 to 4469 of 2019
And
C.M.P.Nos.25291, 25293, 25294 and 25295 of 2019
1.Mr.V.G.Santhosam
2.Mr.V.G.P.Ravidas
3.Mr.V.G.P.Rajadas
4.Mr.V.G.P.Babudas .. Appellants in all CMAs
vs.
1.Mrs.Shanthi Gnanasekaran
2.Mr.V.G.P.Prasaddas
3.Mr.V.G.P.Murphydas
4.Mr.V.G.S.Vinodh Raj
5.Mr.V.G.Selvaraj
6.Mr.V.G.S.Rajesh Alias Amaladas Rajesh .. Respondents in all CMAs
These Civil Miscellaneous Appeals are preferred under Section
37(2)(b) of the Arbitration and Conciliation Act, 1996 to set aside the
impugned orders dated 02.11.2019 passed by the learned Arbitrator in
M.A.Nos.4 of 2019 in Arbitration Claim No.1 of 2019, 4 of 2019 in
Arbitration Claim No.3 of 2019, 4 of 2019 in Arbitration Claim No.2 of
2019 and 4 of 2019 in Arbitration Claim No.4 of 2019.
For Appellants in all CMAs : Mr.S.R.Rajagopal
for M/s.Ojas Law Firm.
For Respondent-1 : Mr.AL.Somayaji,
Senior Counsel for
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Mr.B.Nedunchezhiyan.
For Respondents-4&5 : Mr.H.Karthik Seshadri
For Respondent-6 : Mr.R.Saravanakumar
C OM M M O N J U D G M E N T
The lis on hand arose in result of the orders passed by the
sole Arbitrator on 02.11.2019 in M.A.No.4 of 2019. The sole Arbitrator
passed orders, impleading the first respondent Mrs.Shanthi
Gnanasekaran to participate in the adjudicative process in Arbitration
Claim Nos.1, 3, 2 and 4 of 2019. Challenging the said impleadments,
the Civil Miscellaneous Appeals are filed both on factual and on legal
grounds.
THE COMMON FACTS IN BRIEF:
The appellants state that the partnership firm M/s.V.G.P.
Beach Housing was originally formed on 27.03.1979 by and between
late Mr.V.G.Panneerdas, Mr.V.G.Santhosam, Mr.V.G.Selvaraj,
Mr.V.G.P.Ravidas and Mr.V.G.P.Rajadas. On 16.12.1982, the
partnership firm was reconstituted with the induction of two new
partners, namely, Mr.V.G.P.Babudas and Mr.V.G.S.Rajesh and thereby
every partner was entitled to 1/7th of the net profits in accordance with
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has established a semblance of right, which is sufficient for impleading
the first respondent in the arbitral adjudication. This Court is of the
considered opinion that this itself amounts to expanding the scope of
the arbitration proceedings. A semblance of right referred by the
Arbitrator is relatable to the civil right of the first respondent regarding
her right of inheritance from her father late Mr.V.G.Panneerdas.
“The Doctrine of No-Prejudice” cannot have any
application with reference to the impleadment of a person in a dispute
under the Arbitration Agreement within the ambit and provisions of the
Arbitration Act, 1996. The impact of the application of the said
Doctrine, would result in exercise of inherent powers of the Court of
Law. Thus, the rights of a third person to an Arbitration Agreement
cannot be adjudicated during the further or final hearing of the arbitral
proceedings.
In view of the facts, circumstances and the
discussions elaborately made in the aforementioned paragraphs, this
Court has no hesitation in arriving a conclusion that the Arbitrator has
exercised excess jurisdiction beyond the scope of the provisions of the
Arbitration Act as well as beyond the scope of the contracted arbitral
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proceedings and consequently, the orders dated 02.11.2019 passed by
the Arbitrator M.A.Nos.4 of 2019 in Arbitration Claim No.1 of 2019, 4
of 2019 in Arbitration Claim No.3 of 2019, 4 of 2019 in Arbitration
Claim No.2 of 2019 and 4 of 2019 in Arbitration Claim No.4 of 2019
are quashed. Consequently, C.M.A.Nos.4465, 4467 to 4469 of 2019
stands allowed. However, there shall be no order as to costs. The
connected miscellaneous petitions are closed.
24-02-2020
Index : Yes/No.
Internet: Yes/No.
Speaking Order/Non-Speaking Order
Svn
S.M.SUBRAMANIAM, J.
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