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Chandra Prakash Agarwal v. Bhagirath Agarwal And Others
Factual and Procedural Background
The order resolves three interlocutory applications (IA Nos. 1–3) arising out of an arbitration pending before Justice (Retd.) Monoj Kumar Mukherjee. The underlying dispute is between Bhagirath Agarwal and Chandra Prakash Agarwal, partners of Hindustan Tea Company. Although the arbitration was expected to conclude within one year of an earlier court order dated 15-2-1991, it has remained pending for approximately fourteen years. The present applications seek various forms of interim relief from the Court while the arbitral proceedings continue.
Legal Issues Presented
- Whether a non-party (Manipur Tea Company Pvt. Ltd.) can intervene in, or obtain substantive relief from, the ongoing arbitration proceedings.
- Whether the Court should issue directions with respect to interim orders passed by the arbitrator when a party is aggrieved thereby.
- Whether the Court should enforce the clause in its order dated 15-2-1991 requiring payment of Rs 15 lakhs per year to Bhagirath Agarwal, or leave that question to the arbitrator.
Arguments of the Parties
Applicant in IA No. 3 (Bhagirath Agarwal)
- Contends that Chandra Prakash Agarwal has defaulted on the Court’s directive dated 15-2-1991 to pay a minimum guaranteed profit of Rs 15 lakhs yearly, irrespective of actual profits.
Respondent in IA No. 3 (Chandra Prakash Agarwal)
- Opposes the application, noting that a similar request was previously made and no order was passed (order dated 1-11-1993).
- Argues that a subsequent memorandum of understanding and later events have extinguished any obligation to continue the Rs 15 lakhs annual payment.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
IA No. 1: Manipur Tea Company Pvt. Ltd. is described as a “stranger” to the arbitration; therefore, it lacks standing to intervene. The arbitrator functions as a tribunal and cannot be joined as a party to outside proceedings. The applicant may pursue whatever independent remedies are available under law.
IA No. 2: Once an arbitrator is appointed, recourse against interim orders lies in statutory remedies outside the supervising Court. Acknowledging this, counsel for the applicant elected to withdraw the application, which the Court dismissed as withdrawn.
IA No. 3: The 15-2-1991 order envisioned completion of arbitration within one year, making its interim payment direction temporally limited (“unless modified by the Court”). Given the fourteen-year delay and intervening events, the Court holds that the arbitrator is the appropriate forum to determine whether the Rs 15 lakhs annual payment should continue. The Court clarifies that the term “award” in its earlier order includes an interim award, thereby empowering the arbitrator to issue a binding interim determination. The Court also urges expeditious completion of the arbitral proceedings.
Holding and Implications
DISPOSITION: All three interlocutory applications stand disposed of—IA No. 1 as rejected, IA No. 2 as withdrawn, and IA No. 3 with directions that the arbitrator consider the requested relief and may issue even an interim award.
Implications: The Court declines to grant substantive relief during the pendency of arbitration, reinforcing the principle that the arbitral tribunal is the primary forum for interim measures once constituted. The parties must seek redress before the arbitrator, who is expressly authorized to issue interim as well as final awards. No new precedent is established, but the order underscores judicial deference to arbitral autonomy and encourages prompt completion of the long-delayed proceedings.
Order
IA No. 1
1. The applicant Manipur Tea Company Pvt. Ltd. is a stranger to the proceedings pending before the arbitrator Justice (Retd.) Monoj Kumar Mukherjee. The parties to arbitration are Bhagirath Agarwal and Chandra Prakash Agarwal, who are partners of Hindustan Tea Company. The applicant cannot be allowed relief either by way of intervention or by way of any substantive relief in these proceedings either by this Court or by directing the arbitrator to entertain its prayer. The applicant is at liberty to pursue such remedy as may be available to it under the law for vindicating its grievance raised in the application. The arbitrator is only acting as a tribunal and he cannot be permitted to be joined as party to any legal proceedings initiated by the applicant. The application be treated as disposed of.
IA No. 2
2. The applicant is aggrieved by some orders passed by the learned arbitrator at an interim stage of the proceedings and seeks directions from this Court in that regard. Suffice it to observe that once an arbitrator has been appointed by the Court any party feeling aggrieved by any interim order or direction made by the arbitrator is at liberty to pursue such remedy as may be available to him under the law. That being the position of law, the learned counsel for the applicant seeks to withdraw the application reserving liberty to pursue such other remedy as may be available to the applicant. We record the statement of the learned counsel and dismiss the application as withdrawn.
IA No. 3
3. Bhagirath Agarwal, the applicant herein has moved this application for the following relief:
“It is, therefore, respectfully prayed that this Hon'ble Court may be pleased to direct the appellant to pay to the respondent the sum admissible under the terms and compromise contained in the order dated 15-2-1991 passed by this Hon'ble Court and/or to pass such other and further order which may be found necessary in the circumstances of the case.”
4. The prayer made in this application is vehemently opposed on behalf of the other party Chandra Prakash Agarwal submitting that a similar prayer was made earlier whereon this Court did not make any order. Attention is invited to the order dated 1-11-1993 passed by this Court.
5. However, the learned counsel for the applicant Bhagirath Agarwal submits that Chandra Prakash Agarwal has defaulted in complying with the direction contained in the order dated 15-2-1991 to the effect that: “The petitioners will pay a sum of Rs 15 lakhs every year to the respondent as a minimum guaranteed profit (amount) irrespective of any profit being earned or not.” Mr Gopal Subramanium, learned Senior Counsel for Chandra Prakash Agarwal submits that there has been a subsequent memorandum of understanding and several other subsequent events which disentitle the applicant Bhagirath from claiming the amount of Rs 15 lakhs every year.
6. It is clear that this Court while passing the order dated 15-2-1991 had expected the arbitration proceedings to be concluded and award made by the arbitrator within a period of one year and that is why made certain directions to remain operative for a period of one year and to continue further “unless modified by the Court” till the arbitrator gives his award. Now, about 14 years have passed and the arbitration proceedings are still continuing. In view of the subsequent events, we leave it open to the parties to seek suitable directions from the arbitrator and the arbitrator may after hearing the parties and taking into consideration all the relevant facts and circumstances, including events subsequent to the date of passing of the order dated 15-2-1991, make such directions as may be just and proper, including an interim award in accordance with law, uninfluenced by the directions contained in the order dated 15-2-1991 that the direction made by this Court would continue till the arbitrator gives his award “unless modified by the Court”. In other words, we may say that the word “award” as occurring in the order of this Court shall include interim award also.
7. In addition, we request the learned arbitrator to conclude the arbitration proceedings as expeditiously as possible and dispose of them by making a final award.
8. IA stands disposed of.
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