JUDGMENT Mohammad Rafiq, J. - This application under section 11 of the Arbitration and Conciliation Act, 1996 has been filed by Smt. Anjana Badera, praying for appointment of independent Arbitrator on behalf of the respondents so that the already appointed Arbitrator on behalf of the petitioner and the Arbitrator so appointed by this court, may constitute a three member arbitration panel by selecting third independent Member/Umpire and praying in alternative that this Court may appoint third independent Member/Umpire in accordance with the Arbitration and Conciliation Act, 1996. Further prayer is made that this court may appoint or constitute a single Member arbitral tribunal either consisting of the member suggested by the petitioner or any other independent arbitrator as this court deems fit, to resolve the dispute between the petitioner and the respondents. 2. Facts of the case, as emerging from the pleadings of the parties, are that a partnership firm in the name of M/s. Vishal Farms, was constituted on 23.11.2004 with petitioner Smt. Anjana Badera and respondent Smt. Asha Khandelwal, as partners, for the purpose of agriculture and related activities. The investment and profit & loss sharing between the partners was in the ratio of 40:60, respectively. Both the partners invested the capital in the firm in order to purchase an agriculture land on 03.12.2004 measuring 6.38 hectare from Munni Devi W/o Shri Ramu Mali in the name of the firm. Owing to mistake of nonaddition of land bearing khasra no. 1074 measuring 0.83 hectare in the sale-deed dated 03.12.2004, an amendment was made on 20.12.2004 and same was executed and registered on 20.12.2004. The said property was entered in the revenue records in the name of the Vishal Farms through both the partners, wherein the petitioner had 40% stake. Since accounts of the firm were not being maintained properly, a dispute arose between the partners and the petitioner decided to retire from the firm. As mutually agreed, the petitioner retired with effect from 17.08.2015 and Mr. Om Prakash Khandelwal was inducted as partner. The said retirement was decided to come into effect retrospectively from 17.08.2015 only when the immovable property of the firm was sold within six months and 40% stake of the petitioner was handed over to her or in failure, the property was sold within six months from the proposed date of retirement and the petitioner was paid 40% of market value amount of the property.
3. Mr. Ashok Mehta, learned Senior Counsel for the petitioner, has tried to justify this stand of the petitioner by submitting that the petitioner, in view of the cordial relations between the parties, agreed to sign the deed, blank pages and other proforma documents, as required by the respondent no. 1. Since market value of the land acquired vide sale deed dated 20.12.2004 was quite high, both the parties agreed to the proposed retirement from 17.08.2015 but subject to the aforesaid condition. As per agreement between the parties, interim settlement of accounts was made in lieu of which a sum of Rs. 14,96,738/- was transferred by the respondents vide R.T.G.S. as per the book value in the account of the petitioner. This settlement was arrived at as per the balance-sheet dated 01.04.2015. Book value of the assets, which was valued at Rs. 6,33,00,000/-, however, actual market value of the land was estimated at Rs. 20-25 crore. The respondents told the petitioner that for the purpose of sale of the property, if sale deed was registered, she would be required to submit a sum equivalent to capital gain and registration expenses, which were calculated at Rs. 30,05,928/-. 4. Learned senior counsel submitted that as per the revenue records, name of the petitioner still exists as co-owner of the disputed property. Even two electricity connections were in the name of the petitioners and respondent no. 2 jointly till May, 2016 and thereafter, name of the petitioner was removed in a clandestine manner from all the activities and business of the firm. The petitioner executed power of attorney dated 14.08.2015 on the request of the respondents for the purpose of selling the said property. The respondents have deliberately delayed the sale of the property so that they need not give the remaining amount. The respondents even started looking for a buyer for the said property so that it could be sold. The petitioner revoked the power of attorney vide letter dated 27.05.2016. 5. Mr. Ashok Mehta, learned senior counsel for petitioner, argued that it does not appeal to reason that the petitioner would settle the accounts only for Rs. 14,96,738/- just on the book value and would further submit a sum of Rs. 30,05,928.50 as security for the payment towards capital gain. Clause 23 of the Partnership Deed dated 23.11.2004 between the petitioner and respondent no.
14,96,738/- just on the book value and would further submit a sum of Rs. 30,05,928.50 as security for the payment towards capital gain. Clause 23 of the Partnership Deed dated 23.11.2004 between the petitioner and respondent no. 2 provided that in any dispute arising out of the business of the firm or partnership deed or related to its constitution, during the continuation of the partnership or after the dissolution of the partnership deed, the matter be referred to arbitration. As per said clause, the parties were required to appoint three arbitrators by mutual consent, who would decide the dispute within three months from the date of their appointment and their decision would be final and binding on both the parties. The petitioner appointed Mr. Arif Mohammad Madani, retired District Judge, as her nominee Arbitrator, and called upon the respondents to appoint one of their arbitrators within thirty days so that they can appoint the third Arbitrator/Umpire. However, the respondent, vide letter dated 23.06.2016, replied to the said notice stating that arbitration clause could not be invoked because, pursuant to retirement of the petitioner from 17.08.2015, the partnership firm of the petitioner and respondent no. 2 stood dissolved. Learned Senior Counsel, however, submits that the arbitration clause in the contract in question continues to exist even after the contract is considered void. 6. Mr. Ashok Mehta, learned Senior Counsel, referred to section 92 of the Indian Evidence Act, 1872, (for short, ''the Act of 1872'') and argued that even an oral agreement can be proved in evidence. Such oral agreement, in view of Section 92 of the Act of 1872, shall have to be appreciated in the context of specific written agreement signed between the parties, notwithstanding what is provided in Section 91 of the Act of 1872. As per Explanation 3 to Section 91 of the Act of 1872, the statement, in any document whatever, of a fact other than the facts referred to in this Section, shall not preclude the admission of oral evidence as to the same fact. Learned Senior Counsel, in support of his argument, sought to rely on second and third proviso to Section 92 of the Act of 1872, according to which execution of any separate oral agreement can be proved. 7. Per contra, Mr.
Learned Senior Counsel, in support of his argument, sought to rely on second and third proviso to Section 92 of the Act of 1872, according to which execution of any separate oral agreement can be proved. 7. Per contra, Mr. Rajeev Surana, learned counsel for the respondents, opposed the application and submitted that the petitioner has signed the Memorandum of Understanding dated 17.08.2015, which categorically states that full and final settlement had taken place between the parties in the presence of independent Mediators, namely, Mr. Jai Kishore Khandelwal, Mr. Ashok Kumar Gupt and Mr. Kamal Khandelwal. Therefore, the petitioner is estopped from invoking arbitration clause. Reliance in support of this argument is placed on the judgment of the Supreme Court in M/s. Cauvery Coffee Traders, Mangalore vs. M/s. Hornor Resources (Intern.) Co. Ltd. - 2011 (2) WLC (SC) Civil 684 Learned counsel submitted that this fact and various other facts, which the respondents have brought on record in their reply, were concealed by the petitioner. The petitioner having not come before this court with clean hands, the present application is liable to be dismissed. Moreover, the petitioner has also filed revenue suit. All these facts were concealed by the petitioner in the application. Learned counsel, in support of his argument, relied on the judgments of the Supreme Court in Pandit Chunchun Jha vs. Sheikh Ebadat Ali and Another - AIR 1954 SC 345 , Bhaskar Waman Joshi (deceased) and Others vs. Shrinarayan Rambilas Agarwal (deceased) and Others - AIR 1960 SC 301 , Smt. Gangabai vs. Smt. Chhabubai - (1982) 1 SCC 4 , General Court Martial and Others vs. Col. Aniltej Singh Dhaliwal - (1998) 1 SCC 756 , R.S. Madanappa and Others vs. Chandramma and Another - AIR 1965 SC 1812 , M/s. Raval and Co. vs. K.G. Ramachandran and Others - AIR 1974 SC 818 and that of this Court in Sumer Mal vs. State of Rajasthan and others - 2000 (1) WLC 217 . This application should therefore be rejected. 8. Learned counsel for the respondents argued that in the face of the fact that already a revenue suit had been filed by the petitioner in the court of Assistant Collector-I, Jaipur, if an Arbitrator is now appointed, it would result in multiplicity of the proceedings. It is argued that two parallel proceedings cannot be allowed to continue at the same time.
It is argued that two parallel proceedings cannot be allowed to continue at the same time. Since the main regular revenue suit has been filed, the present proceedings, if allowed to continue, might lead to a possibility of two different Tribunals to come to contradictory decisions, and such a situation must be avoided. Reliance in this regard is placed on the judgment of the Supreme Court in Sukanya Holdings Pvt. Ltd. vs. Jayesh H. Pandya and Another - AIR 2003 SC 2252 and Krishi Utpadan Mandi Samiti Sahaswan District Badaun through its Secretary vs. Bipin Kumar and Another - (2004) 2 SCC 283 and that of the Bombay High Court at Goa in Tulip Hotels Pvt. Ltd. vs. Trade Wings Ltd. - 2010 (1) Mh. L.J. 73. 9. Learned counsel argued that the petitioner has also suppressed the fact that in Clause 1 of MOU, the parties have cleared their dues to each other and made a solemn declaration that nothing was payable to or recoverable from each other. Once this admission is made by the petitioner in the MOU, she is now estopped from making any claim against the respondent. It is argued that the partnership deed dated 23.11.2004 contemplates referral of disputes to Arbitration under Clause 23 only in the event of occurrence of disputes during the ''subsistence of the partnership'' or ''on account of dissolution of the partnership''. Neither was the partnership firm ever dissolved, with the induction of Mr. Om Prakash Khandelwal as a new partner nor is the claim a result of the dispute arising during the ''subsistence of partnership'' between the parties. 10. Learned counsel argued that the provision envisaged in section 92 of the Indian Evidence Act, 1872, exclude its applicability to cases where their exists written agreement. Rule of oral evidence is applicable to only oral agreement and not where there exists separate Memorandum of Understanding like the one dated 17.08.2015 in the present case signed by both the parties. Had there been any other oral agreement, the same would have definitely been mentioned in the written Memorandum of Understanding. The petitioner rather concealed the fact of signing the aforesaid Memorandum in full and final settlement for overall claims. The petitioner is therefore estopped from invoking the arbitration clause.
Had there been any other oral agreement, the same would have definitely been mentioned in the written Memorandum of Understanding. The petitioner rather concealed the fact of signing the aforesaid Memorandum in full and final settlement for overall claims. The petitioner is therefore estopped from invoking the arbitration clause. It is not even the case of the petitioner that any fraud was played against him or he was caused or compelled into signing the Memorandum of Understanding. There can be no case for oral agreement as in the present case not only the Memorandum of Understanding was signed but Retirement Deed was also signed and got registered. There is no assertion by the petitioner that oral agreement exists while the Retirement Deed was signed and the alleged mail was sent on 14.08.2015, which was in full and final settlement and the full and final settlement took place on 17.08.2015. Proviso (3) and (4) to Section 92 of the Act of 1872 is therefore not applicable in the present case. 11. It is argued that a misstatement was made in the written submissions filed on behalf of the petitioner that in case of failure to sell the property within six months from the proposed date of retirement, the petitioner would be paid 40% of the market value amount of the property, whereas there did not exist any such oral agreement. There is not even a whisper about so-called oral agreement either in the Memorandum of Understanding or in the Retirement Deed. It is therefore prayed that the application be dismissed. 12. I have bestowed my anxious consideration to rival submissions and perused the material on record. 13. The significant fact of this case is that the MOU was signed between the parties in which it was agreed that their accounts have been settled and neither of the parties now has to receive any amount from each other, which is what has been stated in Clause 1 of the MOU. The petitioner has concealed many important facts from the court in the originally filed application. The petitioner did not disclose the fact that she along-with the respondent no. 2 Smt. Asha Khandelwal and her husband Mr.
The petitioner has concealed many important facts from the court in the originally filed application. The petitioner did not disclose the fact that she along-with the respondent no. 2 Smt. Asha Khandelwal and her husband Mr. Om Prakash Khandelwal submitted the notice of change of constitution to the Registrar of Firms in Form-E as required by section 63 of the Partnership Act and also Form-B the statements specifying the alteration in the firm along-with her affidavit, which affidavit was published in the Gazette of the State of Rajasthan and in the newspaper. In fact, the MOU in para 4 states that the petitioner Smt. Anjana Badera does not want to continue as partner of the firm and therefore she has decided to retire from the firm and that petitioner Smt. Anjana Badera and respondent Smt. Asha Khandelwal have settled their accounts. Both the parties have valued the land of M/s. Vishal Farms at the market rate, according to which Smt. Anjana Badera has received an amount of Rs. 14,96,738/- through Cheque No. 338035 dated 18.08.2015 of the I.D.B.I. Bank, C-Scheme Branch, Jaipur and that petitioner Smt. Anjana Badera has transferred her 40% share in the Vishal Farms in favour of respondent no. 2 Smt. Asha Khandelwal and also handed over its physical possession on the land to her and declared that henceforth petitioner Smt. Anjana Badera would have no concern with M/s. Vishal Farms and its movable and immovable properties and that Smt. Asha Khandelwal shall become the sole owner thereof. 14. The MOU between the parties also provided that presently the sale deed is not registered by them because of excessive DLC rates as doing so would result in incurring a huge amount as capital gain in the income tax records of the petitioner and besides the petitioner would have to pay huge amount on stamp duty. In fact, in para 6 of the MOU, it was further agreed that in future whenever Smt. Asha Khandelwal decides to sell the land of M/s. Vishal Farms and if eventually she has to pay the income tax on such capital gain by reason of transfer of 40% share of petitioner Smt. Anjana Badera in their favour, respondent Smt. Asha Khandelwal would have to pay the stamp and registration duty on getting the conveyance deed registered.
After deducting the amount of stamp duty and registration charges from the amount of income tax payable by respondent Smt. Asha Khandelwal of the amount of capital gain by petitioner Smt. Anjana Badera. Thus after adjustment in this manner, an amount of Rs. 30,05,928/-, which is a differential amount of adjustment, was paid in cash by Smt. Anjana Badera to Smt. Asha Khandelwal, which shall remain deposited with Smt. Asha Khandelwal. If in future, Smt. Anjana Badera is required to pay the income tax on such capital gain, Smt. Asha Khandelwal shall pay such amount of income tax. In view of the above, the contention that the parties originally agreed on the condition that the respondents shall pay the share of the petitioner as per the market value, cannot be relied to hold that the parties had not settled their account fully and finally. Moreover, the petitioner has already filed a revenue suit for declaration, partition and perpetual injunction in the Court of Assistant Collector-I, Jaipur, impleading not only the respondents but also eight other private parties with two government officers, as defendants. In that suit, the petitioner has prayed for declaration with regard to disputed land in her favour as having 40% share in joint khatedari of 1/5 part of the land in question, and also prayed for partition of the same and consequential benefits. The petitioner also prayed for injunction against the respondent not to interfere in her peaceful possession. 15. The Supreme Court in Krishi Utpadan Mandi Samiti, supra, held that it was not open to the respondent to urge that, even though his sale deed showed a price Rs. 15.40 per sq. yard, the real market value was Rs. 120 per sq. yard. To permit a party to so urge would be to give a premium to dishonesty. Similar view was taken by the Supreme Court in Nanjappan vs. Ramasamy and Others - 2015 Vol. 3 WLP 133 wherein it was held that actual value of land in terms of Section 92 as sale price which was agreed, will be taken into consideration and no contrary evidence shall be accepted. 16.
Similar view was taken by the Supreme Court in Nanjappan vs. Ramasamy and Others - 2015 Vol. 3 WLP 133 wherein it was held that actual value of land in terms of Section 92 as sale price which was agreed, will be taken into consideration and no contrary evidence shall be accepted. 16. The Privy Council in Baraboni Coal Concern Ltd. vs. The Servitors and Shebaits of Sree Sree Gopinath Jiu - AIR 1934 PC 58 , held that the subsequent conduct of the parties is irrelevant consideration where the words in a deed are clear, as are in this case. The subsequent Memorandum of Understanding is wholly irrelevant. The Supreme Court in Bhaskar Waman Joshi, supra, observed that oral evidence of intention is not admissible in interpreting the covenants of the deed. The Supreme Court in Pandit Chunchun Jha, supra, held that where a document has to be construed, the intention must be gathered in the first place, from the document itself. If the words are express and clear, effect must be given to them and any extraneous enquiry into what was though or intended is ruled out. In Bhaskar Waman Joshi, supra, the Supreme Court held that oral evidence of intention is not admissible in interpreting the covenants of deed. In M/s. Rawal and Co., supra, the Supreme Court held that any variance from the original document should only be by the second document and not orally. 17. The Supreme Court in Sasan Power Limited vs. North American Coal Corporation (India) Private Limited - (2016) 10 SCC 813 , held that when a fact is in issue, the same is required to be proved in accordance with the provisions of the Evidence Act. Disposition of the property, whether it be by way of a contract or grant or any other, if reduced to writing, parties are prohibited from giving any evidence regarding the terms of such disposition except the document itself or ''secondary evidence'' of that document, provided that such secondary evidence is otherwise admissible under the Evidence Act. 18. In Central Bureau of Investigation vs. Ashok Kumar Aggarwal - (2014) 14 SCC 295 , the Supreme Court held that Sections 91 and 92 of the Evidence Act provide that evidence may be led to invalidate a document itself.
18. In Central Bureau of Investigation vs. Ashok Kumar Aggarwal - (2014) 14 SCC 295 , the Supreme Court held that Sections 91 and 92 of the Evidence Act provide that evidence may be led to invalidate a document itself. The best evidence as to the contents of a document is the document itself and it is the production of the document that is required by this section in proof of its contents. Section 91 describes the "best evidence rule", while Section 92 comes into operation for the purpose of excluding evidence of any oral agreement, statement etc., for the purpose of contracting or adding or subtracting from its terms. However, these sections differ in some material particulars. 19. The Supreme Court in M/s. Cauvery Coffee Traders, supra, while dealing with somewhat identical case, held that the law on the issue stands crystallized to the effect that, in case, final settlement has been reached amicably between the parties even by making certain adjustments and without any misrepresentation or fraud or coercion, then acceptance of money as full and final settlement/issuance of receipt or vouchers etc. would conclude the controversy and it is not open to either of the parties to lay any claim/demand against the other party. The petitioner reached at the final settlement with open eyes and introduced the money as proposed by the respondent. The petitioner did not raise any dispute in respect of the agreement of price adjustment. Thus, the transaction should be completed between the parties after extensive and exhaustive deliberation. In the facts of the case, the petitioner cannot take a somersault and the offer made by the respondent has wrongly been rejected and there does not survive any dispute. 20. In Sukanaya Holdings Pvt. Ltd., supra, the question was whether where a civil suit filed, dispute can be referred to arbitration in respect of matter covered by arbitration agreement even if suit covers matters beyond arbitration agreement, the Supreme Court answered the same in negative holding that bifurcation of subject-matter of the suit is not permissible. Here in the present case the revenue suit has been filed and the revenue suit covers the dispute and rather goes beyond arbitration agreement as those eight private parties and officers are additionally impleaded as parties to that suit, who are not party to the agreement in question. 21.
Here in the present case the revenue suit has been filed and the revenue suit covers the dispute and rather goes beyond arbitration agreement as those eight private parties and officers are additionally impleaded as parties to that suit, who are not party to the agreement in question. 21. In Tulip Hotels Pvt. Ltd., supra, the Bombay High Court relied on the judgment of the Supreme Court in Sukanya Holdings Pvt. Ltd., supra, and held that in the facts of the case, the question arose for consideration was whether after filing of civil suit, the party seeking arbitration has to only move under Section 8 of the Act of 1996. The High Court was approached after the civil suit was already instituted. Section 11 of the Act of 1996 contemplates appointment of Arbitrators by parties to agreement and upon failure or omission of any of the parties, by the High Court. Thus both provisions operate in distinct fields and normally there should not be any occasion for conflict of orders passed under Section 8 or then under Section 11(6) of the Act of 1996. It was held that two parallel proceedings cannot be allowed to continue at the same time. 22. Section 91 of the Act of 1872, shall have to be preferred over any alleged oral agreement, which is disputed by the respondent. Section 91 of the Act of 1872 provides that when the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself. Section 92 of the Act of 1872, excludes the oral agreement and provides that when the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms.
In fact, not only Section 91 of the Act of 1872 clearly provides that no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document, Section 92 of the Act of 1872 also emphasize that when the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to Section 91 of the Act of 1872, no evidence of any oral agreement or statement shall be admitted as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms. Reliance on second and third proviso to Section 92 of the Act of 1872 is misconceived. Second proviso to Section 92 stipulates that the existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. It further provides that in considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document. Here in the present case, what is sought to be proved by oral agreement is not something with regard to which the document (MOU) is silent and at any rate it is inconsistent with the terms thereof. Third proviso to Section 92 stipulates that existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved. No such condition or precedent to the attaching of any obligation under the MOU in question with regard to grant or disposition of property has been proved or clearly indicated therein and therefore there can be no question of existence of any such oral agreement. 23. Howsoever the petitioner may argue about the oral agreement subsequent to written MOU, as held by catena of decisions referred to above, oral evidence of intention is not admissible in evidence for interpreting covenants of the deed. When wordings in deed are clear, subsequent conduct of the parties is irrelevant consideration.
23. Howsoever the petitioner may argue about the oral agreement subsequent to written MOU, as held by catena of decisions referred to above, oral evidence of intention is not admissible in evidence for interpreting covenants of the deed. When wordings in deed are clear, subsequent conduct of the parties is irrelevant consideration. Actual value of the land, which was declared as the price in terms of Section 92 of the Evidence Act, has to be taken into consideration and no evidence as to socalled oral agreement contrary to that can be accepted, at least for the purpose of Section 11 of the Act of 1996. Moreover, the petitioners have not disclosed full and complete facts in the application, therefore her conduct, even otherwise disentitles her to any relief. 24. In view of the above discussion, a live dispute cannot be said to exist between the parties for the purpose of appointment of Arbitrator in the Scope of Section 11 of the Act of 1996, which is the prerequisite condition for invocation of the jurisdiction of this Court under Section 11 of the Act of 1996. The Supreme Court in SBP & Co. vs. Patel Engineering Ltd. and Another - (2005) 8 SCC 618 has held that the Chief Justice and his designate, while functioning under Section 11(6) of the Act, is bound to decide whether (1) he has jurisdiction, (2) there is a valid arbitration agreement in terms of Section 7, (3) the person before him with the request, is a party to the arbitration agreement, and (4) there is a dispute/live claim subsisting which is capable of being arbitrated upon. Thus the Chief Justice or his designate has to also decide whether there is a dispute or live claim under the purview of arbitration agreement or it should be left to be decided by the arbitral tribunal on taking evidence, along with merits of the claims involved. Clearly, the Chief Justice or his designate can also decide question whether the claim was a dead one or a long barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection. 25. And now with the Arbitration and Conciliation (Amendment) Act, 2015 effective from 23.10.2015, the Chief Justice or his Designate has been substituted by the High Court.
25. And now with the Arbitration and Conciliation (Amendment) Act, 2015 effective from 23.10.2015, the Chief Justice or his Designate has been substituted by the High Court. This Court therefore while dealing with an application under Section 11 of the Act of 1996 can certainly decide at least for the limited purpose of appointing the Arbitrator and referring the dispute to him whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection. Any observation made in this order should therefore be understood only in that perspective and not otherwise. This would however not preclude the parties to avail their remedy before the regular civil court in accordance with law is accordingly. 26. The present application therefore deserves to be dismissed and it dismissed.