Dalpat Singh Naruka vs Karuna Bansal

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 3651-3653 OF 2022 ARISING OUT OF PETITIONS FOR SPECIAL LEAVE TO APPEAL (CIVIL) NO.6449-6451 OF 2022

DALPAT SINGH NARUKA & ANR. ..... APPELLANTS

Versus

KARUNA BANSAL & ORS. ..... RESPONDENTS

ORDER

1. Leave granted.

1.1 The present appeals by way of special leave are directed against

three interim orders dated 24th February, 2022, 11th March, 2022 and 29th

March, 2022 passed by the Division Bench of the High Court of Rajasthan,

Jaipur Bench in appeals preferred by the respondents under Section 37 of

the Arbitration and Conciliation Act, 19961, being aggrieved by an order

dated 11th February 2021 passed by the Commercial Court No.1, Jaipur-II

dismissing an application for interim relief filed by the respondents under

Section 9 of the 1996 Act.

2. On 26th February, 2021, while issuing notice in the appeal

preferred by the respondents and summoning the records of the

Commercial Court, the appellants herein were restrained by the High Court Signature Not Verified

from alienating the property described as “Hotel Grand Uniara”, subject Digitally signed by VISHAL ANAND Date: 2022.05.10 11:45:38 IST Reason:

1 in short ‘1996 Act’ Page 1 of 6 SLP(C) No.6449-6451 of 2022

matter of dispute between the parties. Vide order dated 13 th August, 2021,

the High Court directed the appellants to produce the original stamp papers

on which a Supplementary Partnership Deed had allegedly been executed

by them in view of the plea taken by the respondents that the said Deed

had been antedated to deprive them of their rights over the subject

property. One day before 13th August, 2021, on the complaint of the

respondent No.3 relating to the aforementioned Supplementary Partnership

Deed, FIR No.293/2021 was registered against the appellants and some

others at PS Vaishali Nagar, Jaipur.

3. It is not in dispute that the investigation in respect of FIR 293/2021

was subsequently transferred to the CID-CB and the Additional Director

General of Police, Crime Branch has constituted a Special Investigating

Team (SIT) to investigate FIR No.211/2019, registered against the

respondents on the complaint of the appellants as well as FIR

No.293/2021.

4. It has been submitted by the learned counsel for the appellants

that when the appellant No.1 had filed an application before the High Court

to bring on record the original stamp papers on which the Supplementary

Partnership Deed had been executed along with an affidavit, by the first

impugned order dated 24th February, 2022, the High Court directed the

investigating agency to file a status report pertaining to FIR No.293/2021 Page 2 of 6 SLP(C) No.6449-6451 of 2022

and produce the case diary of the said FIR for its perusal. By the second

impugned order dated 11th March, 2022, upon perusing the status report

and the case diary produced before it, the High Court summoned the

Investigating Officer on the next date of hearing. By the third impugned

order passed on 29th March, 2022, opining that investigation in FIR

No.293/2021 was not being conducted in a fair and impartial manner, the

High Court has directed that said FIR be transferred to the Special

Operation Group (SOG), Jaipur with a further direction that the said

investigation shall be supervised by an Officer of the rank of

Superintendent of Police, who has been called upon to submit a report

within three weeks.

5. Learned counsel for the appellants states that the aforesaid

impugned orders travel far beyond the scope and parameters of

interference, contemplated under Section 37 of the 1996 Act. All that was

required of the High Court to examine in the said proceedings is the order

dated 11th February, 2021, passed by the Commercial Court, rejecting the

Section 9 application for interim relief moved by the respondents under the

1996 Act. He states that within one week of preferring the appeal under

Section 37 of the 1996 Act, the respondents had approached the learned

Sole Arbitrator appointed by the High Court in a Section 11 petition filed by

them and had filed an application under Section 17 for seeking interim

Page 3 of 6 SLP(C) No.6449-6451 of 2022

relief, thus rendering the appeal preferred by them under Section 37, as

infructuous. It is thus contended that the High Court has acted in excess of

its jurisdiction by passing the impugned orders and has virtually taken over

the task of supervising the criminal investigation subject matter of FIR

No.213/2021, registered on the complaint of the respondents, thereby

seriously prejudicing the rights of the appellants.

6. Mr. Sidharth Luthra, learned Senior Advocate appearing on behalf

of the respondents has stoutly defended the impugned interim orders. He

submits that the appellants have left no stone unturned to oust the

respondents from the business under the Partnership Deed constituted on

3rd January, 2008 though substantial monetary investment has been made

by them besides the hard work and efforts put in by them to develop the

hotel business.

7. On hearing the arguments advanced by learned counsel for the

parties and carefully perusing the records, we are of the firm view that by

passing the impugned orders, the High Court has acted in excess of the

limited jurisdiction vested in it under Section 37 of the 1996 Act. The scope

of the appeal preferred by the respondents under Section 37 of the 1996

Act ought to be confined to examining the merits of the order dated 11th

February, 2021, passed by the Commercial Court that has refused to grant

any interim measures in favour of the respondents on the application Page 4 of 6 SLP(C) No.6449-6451 of 2022

moved by them under Section 9 of the 1996 Act. However, it appears that

the respondents have managed to take appeal proceedings on an entirely

different trajectory. As a result, the Appellate Court is conducting a roving

and fishing inquiry relating to the manner in which investigation is being

conducted in respect of FIR No.293/2021 registered at the instance of the

respondents, to the point that not only has a status report and the case

diary been called for, the Investigating Officer has also been summoned

and subsequently, the investigation has been transferred to the Special

Operation Group, Jaipur.

8. We are afraid, none of the three impugned orders could have

been passed by the Appellate Court in proceedings arising from an order

passed under Section 9 of the 1996 Act. If the respondents have any

grievance regarding the unfair or partial manner of the investigation

conducted in respect of the FIR registered on their complaint, it is for them

to seek appropriate legal recourse before the competent court on the

criminal side. However, the proceedings initiated by the respondents under

Section 37 of the 1996 Act can certainly not be permitted to be misused

and virtually highjacked towards this end.

9. For the reasons stated above, the impugned orders dated 24 th

February, 2022, 11th March, 2022 and 29th March, 2022 are not sustainable

and are accordingly quashed and set aside. The High Court is requested Page 5 of 6 SLP(C) No.6449-6451 of 2022

to decide D.B. Civil Misc. Appeal No.431/2021 preferred by the

respondents strictly in accordance with law and well within the parameters

contemplated under Section 37 of the 1996 Act. It is, however, clarified that

this Court has not interfered with or overturned the interim order dated 26 th

February, 2021, passed by the High Court in the above proceedings,

restraining the appellants herein from alienating the subject property.

10. The appeals are allowed and disposed of, along with pending

applications, in the above terms, while leaving the parties to bear their own

costs.

.................................CJI.

[N. V. RAMANA]

...................................J. [KRISHNA MURARI]

...................................J. [HIMA KOHLI]

New Delhi, April 21, 2022.

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