Chandravati Sharma & ANR. v. Neelmani Sharma & ANR.
$~93-102 *
IN THE HIGH COURT OF DELHI AT NEW DELHI
O.M.P. 14/2016 & I.A. 39846/2024 CHANDRAVATI SHARMA & ANR.
NEELMANI SHARMA & ANR.
O.M.P. 15/2016 CHANDRAVATI SHARMA & ANR.
NEELMANI SHARMA & ANR.
O.M.P. 16/2016 & I.A. 10792/2018 CHANDRAVATI SHARMA & ANR.
NEELMANI SHARMA & ANR.
O.M.P. 17/2016 Mr. Ashim Shridhar, Adv., Mr.
Abhishek Mohan Goel, Adv., Mr. Anubhav Sharma, Adv.
NEELMANI SHARMA & ANR.
O.M.P. 18/2016 SMT. CHANDRAVATI SHARMA & ANR.
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NEELMANI SHARMA & ANR.
O.M.P. 21/2016 & I.A. 6845/2016, I.A. 12704/2016 NEELMANI SHARMA VINOD SHARMA & ORS.
Mr. Ashim Shridhar, Adv., Mr.
Abhishek Mohan Goel, Adv., Mr. Anubhav Sharma, Adv.
O.M.P. (COMM) 276/2016 & I.A. 12703/2016 NEELMANI SHARMA CHANDRAVATI SHARMA & ORS.
O.M.P. 25/2018 & I.A. 15389/2018 NEELMANI SHARMA M/S PANDIT MUNSHI RAM & ASSOCIATES PVT.LTD. & ORS. O.M.P.(I) 17/2018 & I.A. 14047/2018, I.A. 14048/2018 Mr. Ashim Shridhar, Adv., Mr.
Abhishek Mohan Goel, Adv., Mr. Anubhav Sharma, Adv.
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NEELMANI SHARMA O.M.P.(I) 18/2018, I.A. 14049/2018, I.A. 14050/2018 NEELMANI SHARMA
CORAM:
HON'BLE MR. JUSTICE JASMEET SINGH
O R D E R
% 08.09.2025 O.M.P. 17/2016 1.
Mr. Shridhar, learned counsel for the petitioner seeks to withdraw the present petition.
2.
Hence, the petition is dismissed as withdrawn. O.M.P. 16/2016, O.M.P. 15/2016, O.M.P. 14/2016 3.
Nobody is appearing on behalf of the petitioners in the present petitions.
4.
Hence, the petitions are dismissed for non-prosecution. O.M.P. 25/2018 5.
This is a petition filed under section 34 of the Arbitration and Conciliation Act, 1996 seeking to challenge the Arbitral Award dated 06.08.2018 passed by the Sole Arbitrator.
6.
The facts are that, in 1981 the respondent No. 1 company was incorporated by one Shri L.C. Sharma and one Shri Prem Chand Sharma. In The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
1995, Mr. Ashok Sharma was inducted as a director on the board of the respondent No. 1 company and in 1997 the petitioner and respondent No. 2 were inducted as directors on the board of respondent No.1 company. 7.
Subsequently, there were changes in the directorships of the respondent No. 1 company and the petitioner and respondent No. 2 continued to remain the directors of the said company. Thereupon, the respondent No. 2 allegedly became the Chairman and Managing Director of respondent No. 1 company (Dispute pertaining to the same is still pending). 8.
On 29.07.2017, respondent No. 2 acting as the Chairman and Managing Director of respondent No. 1 company in exercise of his rights under the Articles of Association of respondent No. 1 company invoked arbitration and on 12.08.2017 appointed the Sole Arbitrator to adjudicate the dispute between the petitioner and respondent No. 2. 9.
The petitioner challenged the unilateral appointment made by the respondent No. 2 vide letter dated 20.10.2017. However, despite the same, the Sole Arbitrator passed the impugned Award dated 06.08.2018 in favour of the respondent No. 2. Hence, the present petition has been filed. 10.
It is settled law that neutrality and independence of an Arbitral Tribunal go to the root of the matter and the principle of equal treatment of parties applies at every stage of arbitration proceedings, including the stage of appointment of the Arbitrator(s). The Hon'ble Supreme Court in TRF Ltd. v. Energo Engineering Projects Ltd. (2017) 8 SCC 377 and further in Perkins Eastman Architects DPC & Ors. v. HSCC (India) Ltd. (2020) 20 SCC 760, has clearly laid down that a person who has an interest in the outcome of the dispute must not have the power to appoint Arbitrator(s), as the same leads to apprehension of bias and prejudice. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
11.
In the present case, the facts above set clearly show that the respondent No. 2 who was a party to the arbitration, appointed the Sole Arbitrator. The same is contrary to the law as laid down in TRF Ltd. (supra) and Perkins Eastman Architect (supra).
12.
For the said reasons, the petition succeeds and the Arbitral Award dated 06.08.2018 is set aside.
13.
The present petition is disposed of with pending applications, if any. O.M.P. 18/2016, O.M.P. 21/2016, O.M.P. (COMM), 276/2016, O.M.P.(I) 17/2018, O.M.P.(I) 18/2018 14.
List on 09.09.2025 at 2:30 P.M.
JASMEET SINGH, J SEPTEMBER 8, 2025/AS The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.