Himanshu Shekhar vs. Prabhat Shekhar

Held

The Court held that the Arbitral Tribunal did not err in directing the appellant to grant access to the GST Portal. Regarding the issue of the company not being a party, the Court found it not in dispute that the company was a closely held family company where both the petitioner and respondent were majority shareholders and conducted business under its name. The Court was unable to accept a technical plea that the company not being a party could frustrate the respondent's rights. Concerning the lack of pleadings, the Court observed that the principal dispute related to the manner of business conduct. Granting access to the GST Portal was deemed expedient by the Arbitral Tribunal to maintain transparency, a relief clearly connected to the disputes before the Arbitrator. The Court affirmed the Arbitral Tribunal's discretion to pass expedient interim measures. The appellant's objection to fairly disclosing company affairs to the respondent, a 33% shareholder, was not sustainable, as the appellant conceded there could be no such objection. The appeal was dismissed.

Facts

The appellant filed an appeal under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996, challenging an order dated March 7, 2022, passed by an Arbitrator. The Arbitral Tribunal directed the appellant to grant the respondent access to the GST Portal of a company, Manohar Lal Sarraf and Sons Jewellers Private Limited, within three days. The appellant contended that the company was not a party to the proceedings and that the impugned order was passed without pleadings for such relief. The respondent and appellant are majority shareholders of the closely held family company, and they conduct business under its name. The High Court noted that the dispute concerned the manner of business conduct and that granting access to the GST portal was aimed at maintaining transparency.

Key Issues

1. Whether the Arbitral Tribunal could issue directions against a company that was not a party to the arbitration proceedings, specifically concerning access to its GST Portal? (Question of law) 2. Whether the Arbitral Tribunal could grant the relief of access to the GST Portal when there were no specific pleadings for such a relief in the application filed by the respondent? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the Arbitral Tribunal erred in directing the appellant to grant access to the GST Portal of Manohar Lal Sarraf and Sons Jewellers Private Limited, as the company was not a party to the arbitration. Furthermore, the petitioner contended that the impugned order recorded no pleadings for the reliefs sought in this regard. Respondent's Arguments: The respondent's arguments are not explicitly recorded in the judgment. However, the court's reasoning suggests that the respondent likely argued for transparency in the business operations, given their substantial shareholding in the company.