BEFORE THE HON’BLE HIGH COURT OF DELHI AT NEW DELHI

ORDINARY ORIGINAL CIVIL JURISDICTION

ARBITRATION PETITION NO. 1010/2022
IN THE MATTER OF:
PAWAN GUPTA & ANR. …PETITIONERS
VERSUS
KAMAL GUPTA & ORS. …RESPONDENTS
REPLY/OBJECTIONS ON BEHALF OF RESPONDENT NO. 7 TO THE
PETITION UNDER SECTION 11 (5) OF THE ARBITRATION AND
CONCILIATION ACT, 1996 READ WITH SECTION 151 OF THE
CODE OF CIVIL PROCEDURE, 1908 SEEKING APPOINTMENT OF
ARBITRATOR IN TERMS OF CLAUSE 16 OF THE MOU/DEED
DATED 09.07.2019.

Most Respectfully Showeth:

1. That the instant petition is neither maintainable in law nor on facts. The

Instant petition has been filed with mala-fides and is liable to be dismissed.

PRELIMINARY SUBMISSIONS:
Dispute is non-Arbitrable
2. That the dispute forming the subject matter of the parent Section 11 petition

before this Hon’ble Court (Hereinafter referred to as ‘the Petition’) is

patently non-arbitrable and the petition is liable to be dismissed inter alia in

view of the law laid down by the Hon’ble Supreme Court in the case of

Vidya Drolia & Ors. Vs Durga Trading Corporation (2021) 2 SCC 1.

3. The Hon’ble Supreme Court in Vidya Drolia’s case (Supra), propounded a

4-Fold Test for determining when the subject-matter of a dispute in an

arbitration agreement is not arbitrable:

i. When cause of action and subject-matter of the dispute relates actions

in rem, that do not pertain to subordinate rights in personam that arise

from rights in rem.

ii. When cause of action and subject-matter of the dispute affects third

party rights; have erga omnes effect; requires centralised

adjudication, and mutual adjudication would not be appropriate and

enforceable.

iii. When cause of action and subject-matter of the dispute relates to

inalienable sovereign and public interest functions of the state and

hence mutual adjudication would be unenforceable.

iv. When the subject-matter of the dispute is expressly or by necessary

implication non-arbitrable as per mandatory statute(s).

4. That the present case clearly falls within the test No.i and ii where the

subject matter of the dispute is clearly affecting the 3rd party rights of a non-

signatory being the son of Respondent No.1 and admittedly a majority

shareholder in different entities of PP Jeweller Group AND other business

entities.

5. It is submitted as that as is the categorical pleading of the Petitioners at para

1 of the Petition, the entire dispute and the purported arbitration agreement is
 arising out of the Oral partition between the family members Dt. 30.09.2014

(Hereinafter referred to as ‘2014 Oral Settlement’); followed by the unsigned

Family Settlement Deed Dt. 20.06.2015 (Hereinafter referred to as ‘2015

Unsigned Deed’); and the Partly Signed Family Settlement Deed Dt.

09.07.2019 (Hereinafter referred to as ‘2019 MOU’).

6. The Non-arbitrability is patent from the following:

 A necessary party-Mr. Rahul Gupta (23% gross shareholder, family

member and the Son of the Respondent No. 1), not being a signatory to

the 2019 MOU particularly when many of the assets and liabilities sought

to be divided carry his substantial holding- See Recital 3, 4, Illegal

assumption in Recital 7, Clause 1,2, Annexure A of 2019 MOU;

 Duly recorded categorical refusal of Mr Rahul Gupta to participate in the

2019 MOU (including arbitration clause)- See Recital 4of 2019 MOU;

 Petitioner No. 1’s withdrawal from the 2019 MOU vide Whatsapp

message dated 28.02.2020 sent to R1, R3, R4 & Mr. Shobhik Gupta

(Family Member) vide which he categorically abandoned the family

settlement;

 Absence of any resolution or majority shareholder’s consent, sanctioning

the substantial decisions purportedly made vide the 2019 MOU regarding

the assets and liabilities of the Respondent Business entities i.e.R7 to

R13- - the said entities clearly not being bound by the settlement or the

arbitration clause;
  Non-inclusion of Corporate entities in the settlement procedure while

partitioning its assets/fixing an arbitration clause behind closed doors

vide clause 16 of the 2019 MOU- the said entities clearly not being bound

by the settlement or the arbitration clause;

 The 2015 unsigned Deed is a draft document, which is not signed by all

the purported parties thereof. It may be noted that petitioner No.1, Mr.

Rahul Gupta and Mr. Mohit Gupta (Stakeholder and Family Member)

have not signed said deed. Hence said deed cannot be deemed to be a

binding agreement between the parties named therein. The subsequent

MOU being purportedly premised on an unsigned deed is also not an

enforceable agreement and clearly not an arbitration agreement;

 Pendency of Civil Suit bearing CS (Comm.) No. 1551 of 2021 before Ld.

District Judge, Commercial Court-6, District Central, Delhi between the

very same parties- basis the very same Deed; where no application under

Section 8 of the Arbitration and Conciliation Act, 1996 (Hereinafter

referred to as ‘the Act’) has been filed and the Petitioners have submitted

to the jurisdiction of the said court and waived the right to seek

arbitration, if any.

7. It is submitted further that the % shareholding of the signatories to the 2019

MOU as on 01.04.2022 (which remains same as on date of this reply) in

various companies arrayed as respondents is as under: -

 Name of signatories to deed of family settlement dated 09.07.2019

Mukesh Gupta

Shikha Gupta
Kamal Gupta
Pawan Gupta

Anshu Gupta
Veena Gupta

Mohit Gupta
Renu Gupta
company
Name of

Total
(R-1)

(R-2)

(R-3)

(R-4)

(R-5)

(R-6)
(P-1)

(P-2)

PPJPL
9.72 8.81 9.44 6.58 34.55
(R-7)*
MDPL
0.008 0.008
(R-10)
MOPL
0.008 0.008
(R-11)
ANUPL
0.008 0.008
(R-12)
SSJPL
50.00 50.00 100.0
(R-13)

* Kamal Gupta (HUF) 3.51

Pawan Gupta (HUF) 2.61

True copies of the ROC records pertaining to the above entities are annexed

herewith as ANNEXURE-R-1.

8. That the 2019 MOU was signed by few individuals in their personal

capacity, neither as shareholder nor as Director nor on behalf of any

corporate entity. The shareholding of signatories (as stated hereinabove) in

the respondent companies is less than 50%. It is submitted that minority

 shareholders cannot bind the company by executing such deeds in their

individual capacity and in any case not without an appropriate resolution

mandated by law is passed by the concerned entity in the meeting of Board

of Directors and / or of the Shareholders. It is submitted further that the

companies which are not signatories to 2015 unsigned deed and 2019 MOU

are in any case, not bound by the said deed(s) or arbitration clause contained

therein making the agreement non-workable and the dispute non-arbitrable.

9. That it is submitted that operations of partnership firms namely, P.P.

Jewellers (Delhi) [respondent No.8] and P.P. Jewellers (Exports) [respondent

No.9] were closed well prior to the subject MOU dated 09.07.2019.True

copies of the documents pertaining to the said entities are annexed herewith

as ANNEXURE-R-2.

10.That apart from the companies arrayed as respondents in present petition,

following companies have also been established by the members of the

family, without which the disputes between the family members cannot be

settled/adjudicated through the process of arbitration: -

S.
Name of the Company
No.
1 Appy Apparels Private Limited
2 Appy Builders Private Limited
3 Appy Diamonds Private Limited
4 Cats Eye Creations Private Limited
5 Charismatic Jewels Private Limited
6 Gardenia Agro Private Limited
7 Glow Jewellery Private Limited
8 Hanuman Robes Private Limited
9 Kavee Apparels Private Limited
10 KSD Properties Private Limited
11 KVRealcon LLP
12 KVMRealtech Private Limited
13 L R Builders Pvt Private Limited
14 Luxury Apparels Private Limited
15 M. G. Buildcon Private Limited
16 M. G. Buildmart Private Limited
17 Maa Jagdamba Town Planners Pvt Ltd
18 Orange Sky Promotors Private Limited
19 P Sen (Enginering) Pvt Ltd
20 P. G. Colonisers Private Limited
21 P. Sen (Technical Services) Pvt Ltd
22 P. V. Buildmart Private Limited
23 P.P.Jewels Private Limited
24 Purnima Associates Pvt Ltd
25 Purnima Buildmart Private Limited
26 Purnima Colonisers Private Limited
27 Shree Radhey Colonisers Private Limited
28 Shree Vishnu Apparels Private Limited
29 V K Mall Private Limited
30 V.K. Buildmart Private Limited
31 Vasant Associates Private Limited
32 Veekay Exim Private Limited
33 Veekeshavam Infrastructure Private Limited
34 VeekindraBuildmart Private Limited
35 Veena Buildcon Private Limited
37 Veenkamal Infrastructure Private Limited
38 VKM Buildcon Private Limited
39 VRG Realtech Private Limited
 The absence of the above entities in the 2019 MOU, makes the settlement

non-workable and the dispute non-arbitrable.

11.That most of the factual averments made by petitioners in the present

petition are subject matter of pleadings of the parties in suit being CS

(Comm.) No. 1551 of 2021 pending before District Judge, Commercial

Court-6, District Central, Delhi, which is apparent from following chart True

copies of the pleadings before the trial court in CS (comm.) No. 1551 of

2021 are annexed herewith as ANNEXURE-R-3.

12.That it is submitted that aforesaid facts and issues, which are subject matter

of adjudication in above mentioned prior instituted suit being CS (Comm.)

No. 1551 of 2021 pending before District Judge, Commercial Court-6,

District Central, Delhi, cannot be referred to arbitrator.

Non-signatory- Reliance placed on Vijay Kumar Munjal’s case patently

incorrect.

13.The Order of this Hon’ble Court dated 31.08.2022 whereby notice was

issued in the parent Petition indicates strong reliance by the Petitioners on

the judgment of this Hon’ble Court in the case of Vijay Kumar Munjal

&Ors. Vs Pawan Munjal &Ors. (2022) 290 DLT 719. It is submitted that

the same is patently incorrect and does not lay down any blanket law that

Family settlements carrying arbitration clauses will mandatorily bind non-

 signatories. If that were to be so, it would be per-incuriam as it would fall

foul of every judgment passed by the Hon’ble Supreme Court. The critical

differentiating factor in the said case is that the Respondent No. 2 therein,

who was the disputing signatory, had expressed implied consent to

arbitration by signing the Adherence Deed accompany the parent settlement.

14.It is submitted that the Doctrine of inclusion of non-signatories is meant as

an exception and not the rule. The exceptional circumstances in which a non-

signatory may be compelled to participate in an arbitration are where a non-

signatory has given implied consent OR is an alter-ego signatory OR part of

the same group of companies OR a party to the composite transaction OR

where a non-signatory knowingly received benefits under the Agreement.

The subject 2019 MOU at Recital 3 and 4 categorically records the refusal

on part of Mr. Rahul Gupta to be party to the settlement/arbitration. This

non-signatory is a 3rd party whose rights and liabilities have been unilaterally

adjudged by the signatories and subsumed with the rights of the Respondent

No.1. Any adjudication by the arbitrator w.r.t the said MOU will clearly

impact the rights and liabilities of the said non-signatory who is not bound

by the Arbitration Agreement.

Group of Companies doctrine before the Larger Bench of Supreme Court.

15.It is submitted that the petitioner herein is trying to rope in the non-

signatories of the MOU dated 09.07.2019 within the arbitration clause and
 seeking to refer the disputes to the arbitration. While the said submission is

before this Hon’ble Court, it is relevant to point out a judgment of the

Hon’ble Supreme Court in Cox and Kings Ltd. Vs SAP India Pvt. Ltd.

&Anr. 2022(7) SCALE 531. The Hon’ble Supreme Court in the said

judgment has noted the inconsistencies in the judgments of its different

benches on the doctrine of group of companies binding the non-signatories

to the arbitration agreement and have referred the said issues to a larger

bench to expound on the intricacies of the ‘group of companies doctrine’.

16.Considering the aforesaid judgment, it is submitted that a similar issue if not

the same binding the non-signatory to the present case is before this Hon’ble

Court in the present case. The inconsistencies in the judgments of the

Hon’ble Supreme Court as observed in the aforesaid judgment makes it a fit

case to wait for the authoritative conclusion on the said doctrine and decide

the present petition accordingly.

Doctrine of Acquiescence, Waiver and Res-Sub Judice- the dispute is

subject of Commercial Suit bearing CS(COMM) 1551/2021 where Section

8 application stands waived.

17.The Petitioner herein has further supressed a vital fact of pendency of a

commercial suit bearing CS(COMM) 1551/2021 titled“M/s PP Jeweller Pvt.

Ltd. Vs M/s PP Jeweller Retail Pvt. Ltd. before the designated commercial

court of Ld. District Judge, Tees Hazari Courts, Delhi on the same subject
 matter. The petitioner deliberately concealed this vital fact from this Hon’ble

Court in the hearing dated 31.08.2022 leading this court to issue notice in an

otherwise non-maintainable case. However, to cover up the said suppression,

the petitioner after issuance of notice filed an application to bring on record

the additional documents on 07.09.2022 which are nothing but the pleadings

in the abovesaid commercial suit where identical issues are pending

consideration.

18.This suit was filed by the answering Respondent seeking permanent

injunction against M/s PP Jewellers Retail Pvt. Ltd.The latter is a concern

promoted and run by the Petitioner No.1 herein along with his son, Mr.

Piyush Gupta, on the cause of illegal use of trademark owned by the

answering respondent among other reliefs. The petitioners, in their Written

Statement to the said suit, have based their defence on the same family

settlements which are part of the present petition to prove their entitlement to

the use of the trademarks and other causes.

19.The purported claims of the petitioners in the present case are already

pending adjudication- making the present petition not maintainable in as

much as the Petitioners have submitted themselves to the jurisdiction of the

Commercial Court. Furthermore, the Petitioners have not filed any

application under Section 8 of the Act in the said case till date, thereby

waiving their right to object to the suit and seeking reference to Arbitration.
20.The said acquiescence is further evident from the order dated 30.07.2021

passed by this Hon’ble Court in FAO (COMM) 120/2021 preferred by M/s

PP Jeweller Retail Pvt. Ltd. against the injunction order dated 26.07.2021

passed by the Ld. District Judge in the titled suit. Vide the said order, this

Hon’ble Court was pleased to vacate the stay on the use of Trademark ‘PP

Jewellers’, ‘PP’ and ‘PPJ’ (logo) by PP Jewellers Retail Pvt. Ltd. This

Hon’ble Court observed that any other aspect/question regarding the

working of the family settlement and the rights emanating therefrom shall be

determined at the trial of the suit. It is pertinent to inform this Hon’ble Court

that the said suit is currently at the stage of disposal of the application moved

by the answering respondent under Order XIIIA of the Code of Civil

Procedure, 1908.

21.It is imperative for this Hon’ble Court to note that the issues pending before

the abovesaid commercial court in the abovesaid suit are identical to the

present petition. This can be seen from perusal of the commercial suit and

the order dated 30.07.2021 of this Hon’ble Court in FAO (COMM)

120/2021. The Hon’ble Court in Para 13 and 14 discusses the contentious

factual and legal issues between the parties pending and under the

adjudication process of the District Judge in Commercial suit. These

overlapping of the issues raised by the petitioner in the present case and the

commercial suit clearly indicates the need to keep these issues within the
 domain of the commercial judge who is currently adjudicating the lis

between the parties.

Arbitration is unworkable-parallel litigations

22. It is submitted that apart from the reasons cited hereinabove, the proposed

arbitration is unworkable (and hence non-arbitrable) because the assets and

liabilities sought to be divided vide the 2019 MOU are not identified clearly

and the apportionment is not defined- See recitals 3,4,7; clauses 1, 2; and

Annexure A of 2019 MOU. It is also submitted that apart from the ongoing

commercial suit, the dispute as regards the shareholding and assets of the

group company are subject matter of litigations pending before the National

Company Law Tribunal, Delhi. These petitions for alleged oppression and

mismanagement of the companies are inter se filed by family members. To

evidence the said statement various cases such as Purnima Gupta Vs

Purnima Colonizers (CP No. 206/241-242/ND/2018) and Purnima Gupta Vs

Purnima Buildmart Pvt. Ltd. (CP No. 187/241-242/ND/2018) and PP

Jewellers Pvt. Ltd. Vs LR Builders Pvt. Ltd. (CP No. 52/241-242/PB/2020)

are currently pending before the National Company Law Tribunal, Delhi

with various interim orders passed on the restraining the functioning of the

said companies.

23.Therefore, any reference of the matter to arbitration would result in decision

making in absence of non-consenting necessary third-party stakeholders

 (individuals and Business entities), overlapping exercise of jurisdiction by

the Commercial Court and the Hon’ble NCLT.

MOU dated 09.07.2019 unregistered, unstamped and therefore

unenforceable in Law

24.It is submitted that the MOU dated 09.07.2019 relied upon by the petitioner

is an unstamped/unregistered document especially in the wake of the

division of immovable properties between the parties herein. The said non-

registration and non-stamping makes the entire contract an unenforceable

one including the Arbitration Clause at Clause 16 of the contract which

cannot be acted upon. The said fact is enough to dismiss the present case

with the liberty to the parties to adjudicate their already pending issues

including the stamping before the commercial courts.

25.It is imperative to state that the 3 Judge bench of the Hon’ble Supreme Court

in Vidya Drolia& ORs. Vs Durga Trading Corporation (2021) 2 SCC 1

while upholding its other judgment in Garware Walls Ropes Ltd. vs Coastal

marine Constructions &Engg Ltd. (2019) 9 SCC 209 observed the factors of

existence and validity of any agreement as intertwined went on to hold that

the arbitration agreement does not exist if it is illegal or does not satisfy the

mandatory legal requirements. It will be fair to submit that the same issue

was discussed by the Hon’ble Supreme court in NN Global Mercantile Pvt.

Ltd. Vs Indo Unique Flame Ltd. Civil Appeal 3802-3803/2020 wherein a

 different 3 judge bench differed with the conclusions of Vidya Drolia (supra)

and referred the said issue to a constitutional bench. The said constitutional

bench is currently in seisin of the said issue.

Factual Pleading on Merits

26.That the answering respondent herein has sought to reply to the factual

averments by the petitioners on the merits of the disputes in a limited manner

as the same is not the subject of a Section 11 petition. It is submitted that

every pleading, prayer, averment and statement in the Petition including the

synopsis & list of dates, is categorically denied by the answering Respondent

as being contrary to law and facts, except to the extent specifically admitted

herein.

27.The answering Respondent further submits that the contents of the

preliminary submissions hereinabove maybe treated as specific responses to

every para of the pleadings in the petition. The same are not repeated in the

para-wise responses below for the sake of brevity.

PARAWISE REPLY ON MERITS:

28.The contents of Para 1 of Petition are denied and the preliminary

submissions are reiterated. It is submitted further that, though it is a matter of

record that the petitioner has filed the present petition under Section 11 (5)

of the Act for the appointment of Arbitrator, it is denied that the disputes

arise out of any oral family settlement dated 30.09.2014 as the same was
 never agreed between the family members. The family settlement dated

20.06.2015 can also not be relied upon in as much as the same is only signed

by 2 family members proving absence of consensus ad-idem between the

family members. That as regards the 2019 MOU, it is stated that the said

agreement is non-binding in as much as the answering respondent and

Respondent Nos. 8 to 13 are not signatory to the same and therefore it cannot

be said that all the parties were at any time consensus ad-idem to the

arbitration agreement. Reliance of the petitioner on the judgment of this

Hon’ble Court in Vijay Kumar Munjal &Ors. Vs Pawan Munjal &Ors. is

misplaced in as much as in the said judgment the members of the family

were signatories to the FSA or the Adherence Deed to the said FSA which is

not the case herein. As mentioned in the preliminary objections, the 2019

MOU is affecting 3rd party rights of members of PP Jeweller group such as

that of Mr. Rahul Gupta who is not a signatory to the agreement and is in

admitted control of the companies mentioned in Annexure A to the MOU

AND that of other Commercial Entities. Mr. Ajai Goyal has been authorised

through the Board Resolution dated 13.02.2020 passed by the Answering

Respondent to sign and verify the present reply to be submitted before this

Hon’ble Court. Copy of the Board Resolution dated 13.02.2020 authorising

Mr. Ajai Goyal is annexed herewith as ANNEXURE R-4.

29.The contents of Para 2 are a matter of record in as much as the same contains

the description of the parties to the present case.

30.The contents of Para 3 to 14 are factual in nature and relating to the merits of

the dispute and do not warrant a response in a Section 11 petition. In any

case, the same are denied as being a skewed, contorted, and incorrect

representation of the history of the group. It is submitted further that the

contents of the same paragraphs where the petitioner No.1 is crediting only

himself for leading the said group is vehemently denied. It is submitted that

the entities mentioned in Para 14 are not the only ones under the family

group of business which would face the consequences of the purported

settlement.The petitioner No.1 has deliberately omitted the names of other

companies forming the subject of the purported settlement in order to

mislead this Hon’ble Court to believe that all the necessary parties-

companies/firms are part of the 2019 MOU. This is a deliberate act to

suppress the fact that this is a dispute in rem, settlement lacks consensus ad-

idem and the dispute is non-arbitrable in toto.

31.It is stated that the even the companies/firms mentioned in the present

paragraph are not signatories to the 2019 MOU. Further, it is pertinent to

mention that the companies mentioned in Annexure A of the 2019 MOU

finds no mention in the present paragraph nor is Mr. Rahul Gupta (who

admittedly controls these companies) a signatory to the 2019 MOU.

Therefore, it cannot be said that the 2019 MOU is dividing all the assets and

liabilities of the group.However, it is submitted that the alleged facts i.e., the

averments made by petitioners in paras 3 to 14 are the subject matter of

 adjudication in civil suit bearing CS (Comm.) No. 1551 of 2021 pending

before District Judge, Commercial Court-6, District Central, Delhi.

32.The contents of Para 15 and 16 are admitted to the extent of the entities

(Respondent No. 10 to 13) mentioned therein as subsidiaries of answering

respondent. It is vehemently denied that as per the family settlement the

answering respondent would belong to the KG Group. It is stated that the

Petitioner herein relies upon the family settlement dated 20.06.2015 which is

an unsigned and unexecuted deed. The so-called understanding of

transferring the ownership of the answering respondent to the KG Group

does not find any mention in the 2019 MOU-which in any case has been

denounced by the Petitioner vide Whatsapp message Dt. 28.2.20. A copy of

the screenshot of the Whatsapp message Dt. 28.2.20 sent by the Petitioner to

various Respondents and family members is annexed herewith as

ANNEXURE R-5.

33.That as regards the family settlement recording the allocation of the Karol

Bagh Showroom at 2700, DeshBhandu Gupta Road, Karol Bagh to the

Petitioner, it is stated that the same is illegal and cannot be enforced without

the presence of its substantial shareholders. Attempting to enforce such

allocation through arbitration is not only impossible but will also amount to

affecting non-consenting 3rd party rights which cannot be allowed through

mutual negotiations of KG and PG Group.

34.The contents of Para 17 and 18 are wrong and misleading and are hence

denied. The contents of the preliminary submissions are reiterated. That the

alleged settlement deed 20.06.2015 had sought to allocate 23% of the Group

assets and liabilities to Rahul Gupta which includes the ownership of

respondent No.8 and 9. The 2019 MOU incorporates the disagreement of

Rahul Gupta to such allocation and goes on to merge the said 23% of Rahul

Gupta with the Kamal Gupta’s group making it a total of 77% of the alleged

business, assets and liabilities. It is important to mention that Recital III to

VIII incorporates the said disagreement of Rahul Gupta and his claims over

the properties of the group companies. Despite such disagreement, the

petitioner and the Respondent No.1 goes on to allocate and merge the

purported 23% share of Rahul Gupta to Kamal Gupta’s (R1) group without

him being the signatory to the said agreement. The said unilateral allocation

without the presence of Rahul Gupta is not only illegal but unenforceable as

a contract and most importantly non-arbitrable.

35.The contents of Para 19 are a repetition of the skewed and concocted version

of the history of the PP Jeweller Group. The answering respondent relies

upon the preceding paragraphs as a response to this paragraph.

36.The contents of Para 20 are denied. It is denied that in the year 2014 on

account of certain disputes arising between family members, it was decided

to distribute the assets/businesses etc. between the family members, for

arriving at a peaceful and amicable family settlement. It is denied that in this

 regard, the family settlement was arrived at between the family members on

30.09.2014 which has been recorded in the family settlement deed dated

20.06.2015. It is stated that no such settlement was arrived on 30.09.2014

nor was such settlement recorded in the purported 2015 unsigned deed.

Perusal of the alleged 2015 deed shows that the said deed is unsigned deed

and incapable being enforced in the court of law for want of consensus

among the parties therein.

37.The contents of Para 21-22 are denied. It is submitted that the entire premise

of the alleged family settlement including the 2019 MOU is false in as much

as the same is affecting 3rd party who is not a signatory to the said

agreement. That the parties to the said MOU clearly admits to the ongoing

dispute with the shareholder of the Group Companies namely Rahul Gupta.

That despite such disputes as to the claims of Rahul Gupta on the group

companies, the petitioner No.1 and the Respondent No.1 have unilaterally

valued his share to 23% in the group companies. This unilateral valuation of

the shares of a non-signatory without any negotiation clearly affects the 3rd

party interest which makes it a non-arbitrable dispute.

38.The contents of Paras 23& 24 are wrong and misleading and denied in toto.

It is stated that these showrooms mentioned in the present paragraph comes

under different ownerships and therefore any division of them needs consent

from the said owners which is completely lacking in the 2019 MOU. That as

regards the entitlement of all family members to use the trademark and logos
 of ‘PP Jewellers’, PPJ and PP in their respective business, it is submitted that

the said issue is under scrutiny of the Ld. District Judge in CS(COMM) 1551

of 2021. That not just the Trademark issues, the entire pleading and dispute

alleged by the petitioner in the present petitioner is in contest before the Ld.

District Judge in the above said commercial suit. It is imperative to state that

the petitioner herein being one of the defendants in the said case has already

filed its substance of dispute in the said case and the same is currently at the

stage of disposal of application of answering respondent under Order 13

Rule 1 A of the Code of Civil Procedure, 1908. As for the stock ownership,

the answering respondent seeks to enforce its rights before the appropriate

forum as and when the opportunity arises, but as per its legitimate claim and

not as per the skewed and constricted representation of the Petitioner.

39.The contents of para 25-26 are wrong and misleading and denied in toto. The

contents of the preliminary submissions are reiterated. It is denied that

having regard to the lesser share in the family business [the petitioner

agreeing for the same in the larger interest of the entire family], and only one

showroom [Karol Bagh showroom-at 2700, DeshBhandhu Gupta Road]

from various existing showrooms belonging to the family as on that date

becoming available to the petitioners under family settlement, the quantum

of liabilities assigned to the petitioner No.1 is NIL while Sh. Kamal Gupta

and his family were to discharge the liabilities of the banks in terms of the

family settlement. It is most humbly submitted thatthe petitionersbe put to

 strict proof of the facts mentioned in the Paragraph 25 wherein they state that

the quantum of the liabilities assigned to the petitioners was NIL. Both, the

unsigned agreement dated 20.06.2015 or the MOU dated 09.07.2019

nowhere mention the liabilities of the petitioner to be NIL. On the contrary,

the clause 10 of the 2019 MOU categorically records the right of the parties

to properties only upon clearance of the respective share of liabilities as

mentioned in Annexure D to the said agreement.

40. The contents of Para 27-29save the matters of record, are wrong and denied.

It is misleading to state the stocks of 3 entities [respondent No. 7, 8 and 9] as

on 30.09.2014 were also decided to be distributed/allocated amongst family

members as per the proportionate share of the family members in terms of

family settlement. The petitioner herein is misleading this Hon’ble Court to

read something which is not there in any agreement relied upon by him.

Neither the 2015 unsigned deed nor the 2019 MOU carry such condition as

depicted by the petitioner in the present paragraph. Recital 4 and clause 13 of

the unsigned 2015 deed though talks about the immediate release of stocks

and properties in favour of the parties, the same was given up in the 2019

MOU which categoricallyrecords in clause 10 that the rights of the parties

are subject to clearance of their respective share of liabilities as mentioned in

Annexure D to the said agreement. It is denied that Kamal Gupta was to

settle all loan accounts with the banks as per the available/applicable

schemes including OTS etc. As per the 2015 unsigned deed and 2019 MOU,
 the petitioners have 23% share in the liabilities of business entities but have

not contributed any money towards their share of liabilities. The petitioner is

claiming his rights over the stocks and properties without performing its part

of contract as to the clearance of liabilities as per Clause 10 of the 2019

MOU which he has also sought to abandon vide WhatsApp message Dt.

28.2.20. This aspect is also in issue in above mentioned prior instituted civil

suit bearing CS (Comm.) No. 1551 of 2021 pending before District Judge,

Commercial Court-6, District Central, Delhi.

41.The contents of Paras 30-34 are again wrong and misleading and hence

denied. The Petitioners having sought to abandon the 2019 MOU vide a

WhatsApp message dt. 28.2.20 and having not performed its part in

discharging the liabilities as per clause 10 of the 2019 MOU, cannot claim

any legitimate rights under the same. The remainder are speculations of the

Petitioner which have no basis in facts.

42.The contents of Para 35-40 are wrong, false, and hence denied. It is

vehemently denied that the petitioner herein remains sincerely committed for

complete implementation of family settlement in letter and spirit. The

petitioner has not performed any part of the 2019 MOU(and sought to

abandon it vide WhatsApp message dt. 28.2.20). It is submitted that

petitioner had to contribute their share towards the discharge of liabilities,

which they have deliberately sought to not do. Now, when Kamal Gupta and
 group after facing extreme hardships and harassments, settled (or are about

to settle) the liabilities of bank without contribution of petitioners, petitioners

cannot claim benefits under the aforesaid family settlement deeds, which

they themselves have abandoned. Further, the petitioners’ rights (if any) as

per 2019 MOU, were subservient to that of the answering respondent No.7

and included the mandate of not setting up a competing business in said

showroom at Karol Bagh. This aspect of the disputes between the parties is

directly and substantially in issue in prior instituted civil suit bearing CS

(Comm.) No. 1551 of 2021 pending before District Judge, Commercial

Court-6, District Central, Delhi.

43.That the contents of Para 41 are wrong, false, and hence denied. It is

specifically denied that the respondent No.1 is acting in blatant

violation/contravention of the terms and conditions of the family settlement.

The alleged acts and omissions of the respondent no.1 mentioned in this

paragraph are baseless and without any substance in as much no prima facie

evidence whatsoever has been put across by the petitioner to substantiate the

said allegations.

44.That the contents of Para 42 and 43 as regards the petitioner approaching this

Hon’ble Court under OMP (I) (COMM) 186/2022 and securing the order

dated 05.07.2022 are not denied as the same being matter of record. The

remainder of the averments are denied. However, it is stated that the said

order has been secured by the petitioner herein by alleging facts which does
 not exist and thereby playing fraud upon this Hon’ble Court. The said order

being passed on day 1 without the reply of the Respondents being on record;

the Petitioner reserves the right to assail the same as permitted by law.

45.The contents of para 44 to 47 are a matter of record and need no reply

46. The contents of Para 48 areare wrong and denied. Preliminary submissions

are reiterated. It is submitted that for the reasons stated in preliminary

submissions and in preceding paras, matter is non-arbitrable and the present

petition may most humbly be dismissed.

47.The contents of Para 49 are misleading to say the least. Though there is no

dispute to the judgment of the Hon’ble Supreme Court cited by the petitioner

herein, the said judgment needs to be assessed as per the facts and

circumstances of the present case. Besides, it is a settled law the judgments

are not to be construed as statutes as held by the Hon’ble Supreme Court in

Escorts Ltd. vs Commissioner of Central Excise, Delhi (2004) 8 SCC

335. The Hon’ble Supreme Court in Para 8 of the said judgment held as

under:

“Courts should not place reliance on decisions without discussing

as to how the factual situation fits in with the fact situation of the
decision on which reliance is placed. Observations of courts are
neither to be read as Euclid's theorems nor as provisions of a
statute and that too taken out of their context. These observations
must be read in the context in which they appear to have been
stated. Judgments of courts are not to be construed as statutes. To
interpret words, phrases and provisions of a statute, it may become
necessary for Judges to embark into lengthy discussions but the
discussion is meant to explain and not to define. Judges interpret
 statutes, they do not interpret judgments. They interpret words of
statutes; their words are not to be interpreted as statutes.…”

The aforesaid judgment of Kale vs Dy. Director of Consolidation

(1976) 3 SCC 119 relied upon by the petitioner is squarely

distinguishable in the facts and circumstances of the present case. The

present case is not a clear one as propounded by the petitioner but a case

of family settlement where all the family assets, businesses or liabilities

and members are not present. Perusal of the Recital 1 to 4 of the said

2019 MOU records the claim of a substantial shareholder of the group of

companies of lead by the answering respondent. The agreement has

apparently decided the share of this family member and further subsumed

his share into a particular family group without his consent or presence

during the alleged settlement discussions. It is imperative to state that this

member is not a signatory to the agreement or a party to the present

proceedings. Annexure A to the said agreement, mentions the list of the

companies under the control of this member which have intentionally not

been considered in the said agreement.

22. The contents of Para 51 to 53 are wrong, false and hence denied.

Preliminary submissions are reiterated. It is specifically denied that any

attempt whatsoever has been made by the petitioners for achieving the

implementation of the family settlement. It is denied that the answering

respondent herein continue to indulge in acts of omission and commission

 including by illegally dissipating/alienating/siphoning off the family

properties covered under the family settlement, and which have fallen to

the share of the petitioners, thereby causing irreparable injury to the

petitioners. The petitioners are illegally seeking arbitration in a non-

arbitrable matter based on an unworkable arrangement which does not

even carry the consensus or signature of the necessary party(ies).

Moreover, the Petitioners having chosen to not discharge its

responsibilities under the agreement and having sought to abandon the

same vide WhatsApp dt. 28.2.20, can surely not seek the benefits of the

same. As for the order passed by this Hon’ble Court u/s 9, the same is a

consequence of suppression of facts and misleading this Hon’ble court by

the Petitioners who did not get an opportunity to file a reply in the same.

Theanswering respondent is in process of filing an appeal against the said

interim order.

23. The contents of Para 54 to 61 are denied except to the extent of matters of

record, if any. It is submitted further that the petitioners be put to strict

proof of the averments therein particularly regarding jurisdiction and

documentation.That in response to contents and averments made in para

60, it is submitted that majority of the facts between the parties are

directly and substantially in issue in prior instituted suit being CS

(Comm.) No. 1551 of 2021 pending before District Judge, Commercial

 Court-6, District Central, Delhi, therefore matter is non-arbitrable. It is

denied that the present petition if filed bona fide.

PRAYER

Prayers of the petitioners are wrong and misconceived. Petitioners are not

entitled to any of the reliefs prayed for. In the light of the facts and the

settled law pleaded it is most respectfully prayed that this Hon’ble Court

may kindly be pleased to dismiss the present petition in toto with costs.

RESPONDENT NO. 7

THROUGH

MIMANSA LAW OFFICES

Advocates for Respondent No.7
C-6/50, Safdarjung Development Area, New Delhi-110016
011-26562650, 9899809187
mail@mimansalaw.in
Place: New Delhi

Date: 9.10.22