VINOD KUMAR SACHDEVA (DEAD) THR LRS versus ASHOK KUMAR SACHDEVA & ORS

Citation: [2023] 9 S.C.R. 1194 · Decided: 25-07-2023 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2023] 9 S.C.R.
[2023] 9 S.C.R. 1194 : 2023 INSC 650
1194
VINOD KUMAR SACHDEVA (DEAD) THR LRS
v.
ASHOK KUMAR SACHDEVA & ORS
(Civil Appeal Nos. 4656-4657 of 2023)
JULY 25, 2023
[DR. DHANANJAYA Y CHANDRACHUD, CJI,
J B PARDIWALA AND MANOJ MISRA, JJ.]
Arbitration and Conciliation Act 1996 – s.8 – Reference to
arbitration – When erred – MoU was arrived at between brothers-
the appellant and the first respondent wherein joint family properties
were to be liquidated to repay the liabilities of the business – MoU
contained an arbitration agreement – Suits instituted by the
appellant, first respondent filed applications u/s.8 seeking reference
to arbitration – Applications dismissed by Trial Court – Order set
aside by High Court, disputes in both the suits were referred to
arbitration u/s.8 – Held: The MoU was between the appellant and
the first respondent – The appellant instituted two suits – On facts,
there were several parties to the suit who were not parties to the
arbitration agreement – Since, the MoU was executed exclusively
between the appellant and the first respondent, the reference to
arbitration u/s.8 was patently in error – The non-family
shareholdings, in any  event, cannot be bound by the terms of the
MoU since they are not parties to the document – Impugned judgment
set aside – Applications filed by the first respondent u/s.8 dismissed.
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.4656-
4657 of 2023.
From the Judgment and Order dated 01.08.2017 of the High Court
of Punjab & Haryana at Chandigarh in CRN Nos.2819 and 2820 of
2017.
Rajiv Talwar, Sanjay Sarin, Ms. Gagan Deep Kaur, Pushkar Karni
Sinha, Dinkar Kalra, Advs. for the Appellants.
Vishal Mahajan, Abhishek Mahajan, Anil Kumar, Reena Devi,
Vinod Sharma, Gunjan Kumar, Rajeev Maheshwaranand Roy, P.
Srinivasan, Advs. for the Respondents.
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The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, CJI
1. Leave granted.
2. The appeals arise from a judgment of a Single Judge of the
High Court of Punjab and Haryana dated 1 August 2017 in CR Nos
2819 and 2820 of 2017. Both the petitions involving the jurisdiction under
Article 227 of the Constitution arose from the orders passed 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, namely, Case No 64/2438/2014 and Civil Suit No
28/53/2015.
3. The appellant and the first respondent are brothers and were
conducting business in the name and style of Sachdeva and Sons in
partnership. The partnership is alleged to have purchased a number of
properties in the name of the appellant and his deceased father. It has
also been alleged that subsequently the ownership of the property was
transferred to a concern by the name of Sachdeva and Sons. A private
limited company has since been incorporated.
4. On 14 September 2010, a Memorandum of Understanding2
was arrived at between the appellant and the first respondent in terms
of which it was decided that the joint family properties should be liquidated
to repay the liabilities of the business which had arisen over a period of
time. The MoU contained an arbitration agreement in Clause 15 in the
following terms:
“15.
That in case of any clarification needed or dispute arising,
the same shall be referred for settlement and arbitration
to Revered Maa Deva Ji and/ or Sh.Surinder Kumar
alias Chhindi Ji of Ghaziabad and/ or if required, to any
other person to be mutually appointed and decision of
the arbitrator(s) shall be binding on both the parties. The
arbitration shall however, always be in accordance with
the Arbitration and Conciliation Act, 1996 as amended
from time to time.”
5. The appellant instituted a suit before the Civil Judge (Junior
Division), Amritsar, numbered as Case No 64/2438/2014 against the first
1 “1996 Act”
2 “MoU”
VINOD KUMAR SACHDEVA (DEAD) THR LRS v. ASHOK KUMAR
SACHDEVA
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SUPREME COURT REPORTS
[2023] 9 S.C.R.
respondent and Sachdeva and Sons Industries Private Limited seeking a
permanent injunction in the following terms:
“Under the circumstances, above referred, it is most
respectfully prayed that a decree for permanent injunction
restraining the defendants themselves, through their officials,
agents, privies and representatives from selling or alienating
in any manner land having an area of 10 ½ qillas with Khasra
Nos. 29/12(8-0), 11/
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