Allowed

Akshay Kumar Sanghi and Anr. v. Ratan Kumar Sanghi and Ors.

Rajasthan HC6 Sept 2018CMAP/9/2017

Case brief

AI extract

What is this about?

High Court considered a complaint of vexatious litigation by a family member against petitioners bound by a Supreme Court-approved family arrangement. Respondent gave an affidavit pledging not to file further vexatious proceedings. Court accepted this as binding and terminated the present proceedings.

What did the court decide?

Proceedings terminated; FIR No. 141/2011 and all proceedings emanating therefrom quashed.

Akshay Kumar Sanghi and Anr. Vs Ratan Kumar… — Writ and Judicial Review | Rajasthan HC (2018)

¶1

HIGH COURT OF JUDICATURE FOR RAJASTHAN JODHPUR

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D.B. Misc. Application No. 9/2017

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Akshay Kumar Sanghi And Anr.

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----Petitioners

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Versus

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Ratan Kumar Sanghi And Ors.

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----Respondents

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Connected With

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D.B. Civ. Leave to Appeal No. 1/2017

¶10

Akshay Kumar Sanghi And Anr.

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----Petitioners

¶12

Versus

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Ratan Kumar Sanghi And Ors.

¶14

----Respondents

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For Petitioner(s) : Mr. Lokesh Mathur. For Respondent(s) : Mr. Naman Mahnot.

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HON'BLE THE CHIEF JUSTICE MR. PRADEEP NANDRAJOG HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

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Order

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06/09/2018

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Late Moti Lal Sanghi, the family patriarch died on 1961. There were 3 family businesses. One son, (Late) N.K. Sanghi took charge of family business in Rajasthan. The next son (Late) A.K. Sanghi took charge of the family business at Delhi and the remaining two, R.K. Sanghi and M.K. Sanghi took charge of business at Bombay. In the year 1964 Sanghi Motors Private Limited (Bombay) expanded to establish a factory for manufacture of oxygen in the name of Sanghi Oxygen. R.K. Sanghi started managing the said division and the youngest brother M.K. Sanghi started managing the motor division.

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[CMAP-9/2017]

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(2 of 6)

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Whether in the form of partnership firms or companies, the family business was carried by brothers like a partnership firm in which all the brothers had cross holdings. This has been recognised by the Supreme Court in the order dated 1^st December, 2015 disposing three Civil Appeals, lead appeal being Civil Appeal No.3687/2006 Rajni Sanghi vs. Western Indian State Motors Ltd. & Ors. Friction arose. The four brothers signed an agreement on 06.07.1983. It was to resolve the disputes which was simmering amongst the brothers. Attempt was made to partition the family business. The family agreement involving the methodology of partition was chalked out in a board meeting of M/s Sanghi Motors Private Limited (Bombay) on 22.02.1984. It ran into trouble. The four brothers entered into an arbitration agreement on 06.08.1984 and appointed one Sh. H.K. Sanghi, a family friend as the sole arbitrator. Before the award could be published M.K. Sanghi filed a company petition bearing C.P. No.128/1985 before the High Court of Bombay seeking injunction against A.K. Sanghi and R.K. Sanghi in respect of shares and management of both the divisions of Sanghi Motors Private Limited (Bombay). Proceedings were initiated in Delhi High Court challenging the existence and validity of arbitration agreement dated 06.08.1984. During the pendency of the proceedings an award came to be pronounced on 03.12.1987. The company petition was thereafter filed in this Court concerning Western Indian State Motors Ltd.

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Multifarious proceedings between the family resulted in a scheme by consent being approved by this Court on 05.09.1994. The same was challenged in appeal by M.K. Sanghi bearing Civil Special Appeal No. 30/1994. The appeal was partly allowed. Review thereof was rejected and matter reached Supreme Court.

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[CMAP-9/2017]

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(3 of 6)

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In a judgment, tracing the above facts, pronounced on December 1^st , 2015, the Supreme Court held that the parties would be bound by the family arrangement which was affirmed. Concerning implementation of the family arrangements the only liberty granted was in paragraph 28 of the decision of the Supreme Court which reads as under:-

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“ 28. We have examined the Division Bench Judgment of the Rajasthan High Court under challenge by Rajni Sanghi and we find that the remand order is not on the basis of any defect in the agreements or supplementary agreements but on account of certain technical requirements which should have been ignored when the issues had been settled by all the stake holders by reaching amicable agreement. The companies of family of four brothers are almost like partnerships and when all were agreeable, interest of justice was best subserved by recognizing even the supplementary family settlement of 1995 in favour of Rajni Sanghi as well as the original family arrangement of 1994 accepted by the Company Judge. In that view of the matter the order of remand under challenge at the instance of Rajni Sanghi is set aside and both the family arrangements indicated above are affirmed. If any party fails to act as per those arrangements within three months, the aggrieved party will be free to initiate appropriate proceedings including those of contempt before the concerned High Court or seek execution of the agreement through the other appropriate proceedings. Civil Appeal No.3687 of 2006 is allowed to the aforesaid extent and is disposed of accordingly. “

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It is in the aforesaid backdrop we are called upon to decide whether Ratan Kumar Sanghi and his wife Pushpa Sanghi are resorting to vexatious proceedings against the petitioners. First

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[CMAP-9/2017]

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(4 of 6)

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petitioner is son of late N.K. Sanghi and the second petitioner is wife of the first petitioner. As noted above, disputes pertaining to Western Indian State Motors Ltd. became the subject matter of the compromise between the parties and yet we find that in respect of the disputes which arose out of settlement in an FIR bearing No.209, P.S. Shastri Nagar, Jodhpur was lodged by the respondent No.1 alleging offences against the petitioners under Sectin 420, 406, 409 and 120B IPC. The police investigated the FIR and submitted a closure report before the Additional Chief Judicial Magistrate, the learned Magistrate closed proceedings in the FIR. Thereafter another FIR No.307 was filed at P.S. Sardarpura at the instant of the respondent alleging offences under Sections 406, 420 and 120B IPC. The same also resulted in closure report. Thereafter respondent No.1, on the same allegations has made a complaint at Doctor D.B. Marg Police Station, Bombay and the grievance of the applicants is of being harassed in said complain lodged.

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Notice being issued to the respondent we find that the respondent did not file a reply through the counsel but sent a communication dated 08.03.2018 alongwith an affidavit to the Registry of this Court leveling allegation against the Registry of not accepting the affidavit filed on behalf of his counsel Naman Mahnot, Advocate. On 03.04.2018 a query was put to the counsel by the Court regarding to communication dated 08.03.2018. 7. Learned counsel stated that he had not received any affidavit to be filed in reply and sought time to obtain instruction from Ratan Kumar Sanghi concerning his communication dated 06.03.2018. On the next date an affidavit was filed by Ratan Kumar Sanghi stating that he never gave affidavit to Mr. Naman

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[CMAP-9/2017]

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(5 of 6)

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Mahnot, Advocate and that his communication dated 08.03.2018 was misdirected.

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Deferring hearing, Mr. Naman Mahnot, Advocate was directed to obtain instruction from the respondents whether they were willing to make statement in this Court that in future they would not resort to any proceeding save and except as permitted by the Supreme Court.

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Today, Mr. Naman Mahnot handed over to us an affidavit deposed before a notary by Ratan Kumar Sanghi at Bombay on 19.04.2018. The affidavit has two paragraphs which read as under.

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“1. That I am a law abiding Senior Citizen of India and having full faith in the rule of law and Indian Judicial System.

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2. That I have not filed any vexatious litigation against the present Petitioners. It is further stated as per the directions given by this Hon’ble High Court on 12.04.2018, I humbly state that I will not file any vexatious litigation against the present Petitioners. However, with due respect, I reserve my right/ liberty given by Hon’ble Supreme Court of India in “Rajni Sanghi v. Western Indian State Motors Limited & Ors.” [Civil Appeal No.3687 of 2006].”

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We have taken the affidavit on record. In paragraph 2, respondent No.1 has affirmed on oath that he will not file any vexatious litigation against the petitioners. 11. We bind the respondent to the statement made by him before the oath commissioner and terminate the present proceedings quashing F.I.R. No. 141/2011 filed by the first

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[CMAP-9/2017]

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(6 of 6)

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respondent before the learned Additional Chief Metropolitan Magistrate, Girgaum, Bombay. All proceedings emanating therefrom are also quashed.

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We make it clear that concerning the settlement amongst the family if anyone is having any grievance only remedy available is to file an application in this Court as permitted by the Supreme Court.

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(Dr. PUSHPENDRA SINGH BHATI),J (PRADEEP NANDRAJOG),CJ

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Ashutosh

Akshay Kumar Sanghi and Anr. v. Ratan Kumar Sanghi and Ors.

Case brief

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What did the court decide?

Akshay Kumar Sanghi and Anr. v. Ratan Kumar Sanghi and Ors.

Case brief

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