Rajesh Khanna v. National Agricultural Coop Marketing Fed of India Ltd

order dated

4.4.08. This objection is therefore misconceived and hence rejected."

¶22There is also no dispute about the fact that at the time when the petitioners moved the joint application along with NAFED for bringing the settlement on record, they used the expression "all disputes are settled". It was on this application that the order dated 16.05.2007 was passed by the Court:- "IA No. 5743/2007 & OMP No. 291/2006 By this application parties have placed on record the settlement arrived at between the parties including added parties. The application is accompanied by affidavits of the parties and the settlement arrived at. The settlement is signed by the respondent as well as Mr. Sandeep Khanna as regards other respondents they have given individual guarantees and undertakings for implementation of the settlement. The settlement is sought to be implemented through Court. Since, the parties have arrived at a compromise in respect of the entire dispute, which was referred to the Arbitrator, the settlement is considered as the final settlement of dispute between the parties and the proceedings before the Arbitrator therefore have become redundant. The settlement is to be implemented by parties in phases. The first phase is sale of property no. E-19, East of Kailash, New Delhi which was attached by this Court. The respondent has to pay Rs. 5 crores within 30 days from today after sale of the property.

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Respondent is given permission to sell this property, the attachment is lifted for this purpose and the payment of Rs. 5 crores be made in terms of the undertaking within the period specified. This OMP is disposed of with liberty to the parties to move appropriate application seeking implementation of the compromise.

Dasti."

¶23The Single judge also observed that the proceedings before the Arbitrator had become "redundant" in view of the settlement and at that time the Appellants had not contented that their counter claims had survived despite the settlement. The Arbitrator, in view of the settlement, had adjourned the matter sine die. The appellants did not object to the said order and did not seek adjudication of their counter claim but allowed the proceedings to be adjourned sine die. It was observed that for the first time when the matter was sent back by the Court for passing an award in terms of settlement, the appellants urged this objection. Significantly, the settlement relates to all the disputes arising out of the MOU's and addendum dated 20.09.2004, 27.02.2004 and 01.03.2004. Since the parties by virtue of the settlement had sorted out all their disputes arising of MOU's, it could not be said that any dispute had survived between the parties under the said MOU. It is further apparent that the M/s Rital Impex was advanced a sum of ` 75 crores and M/s Kripa Overseas-a sum of ` 10 crores, thus totaling about ` 85 crores by the NAFED and the settlement amount is ` 43 crores plus interest of about ` 17 crores and service charges of about `

1.5 crores.

Page 23

¶24In the light of these facts, it is apparent that the appellant's plea is meritless and frivolous. This court, therefore, rejects the submission that the failure to consider the appellants' counter claim vitiates the award. The reasoning in the award and the impugned judgment, on this aspect are sound; the award cannot be termed patently illegal or unreasonable.

¶25The Appellants urged that they never defaulted in the payment and had made the payments as per the terms of settlement. It was argued that in terms of settlement, payment was subject to sale/mortgage of properties i.e. E-19, East of Kailash, New Delhi-110065 and Mohan Cooperative Industrial Area respectively. Since the properties could not be sold for the reasons beyond their control, liability could not be fastened on them. As the sale was to be through public auction, the appellants could not be found fault with. The appellants argue that the award and the impugned judgment are in error in overlooking this vital aspect.

¶26NAFED had urged that in terms of the settlement, the Appellants were required to make the payment in time bound manner i.e. ` 5 crores was to be paid within 30 days and ` 20 crores within 60 days and balance of ` 18 crores after 90 days in three equal installments of ` 6 crore each. It is submitted that payment was not subjected to sale of any property and since the appellants were facing crunch of money, they were under the settlement given several benefits including 50% concession of the interest charges and payment of interest on unpaid amount with diminishing balance at the rate of 15% in case of "default" only. The two properties were attached by the Court and in order to

Page 24

make it convenient for appellants, who were facing financial crunch, and it was agreed that the property be released to them but the payment was independent of the release of the property.

¶27There can be no denial that under terms of the settlement interest was payable only in case of default in payment by the appellants. On this issue after hearing the parties the learned Arbitrator had recorded the submissions of appellants as under:- "He also submitted that one of the benefits under the compromise is the settlement of principal amount and interest payable in different phases. The liability is to be liquidated as per the terms and conditions of settlement. Only in the event of defaults/non-performance of Therefore, interest can be levied otherwise benefit has to accrue to the respondent. It will be incumbent for the Arbitrator to adjudicate upon whether there has been default on the part of which of the parties and then to adjudicate upon the principal and interest due and payable by the respondent."

¶28After considering all the relevant facts on record, the learned Arbitrator proceeded to deal with those contentions in the following manner. "It is an admitted fact that for one reason or the other, the respondents could not and were not able to strictly adhere to the terms of settlement by making payments, within the time, as stipulated in the terms of settlement. There were defaults. Whether defaults were deliberate, bonafide or intentional, is not subject matter of the arbitral proceedings. The scope of the arbitral proceedings now is limited as directed in the order passed on 24th April, 2008."

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¶29The said findings were challenged before the learned Single Judge who dealt with is extracted below- "13. I am of the firm opinion that this contention that no defaults have been committed is clearly misconceived because a reading of the various clauses clearly show that one is the factum of payment within a time and the second is the manner by which repayment has to be made. The manner of repayment viz by the sale of the properties cannot be confused with the factum of the time of repayment. The time of repayment runs independently and disposal of the properties was only a manner and method of repayment of the dues as per the schedule of payment fixed. I do feel that the terms of the settlement have to be read in a practical way and which has been so done by the Arbitrator by holding that defaults have been committed in view of the non-payment of the installments of Rs.5 crores, 20 crores and 18 crores within a period of 30 days, 60 days and 90 days as stated in the clauses 2 to 4 of the settlement dated 3.5.07. Any other interpretation would lead to an absurdity because the same would mean that payment of the dues is indefinitely postponed depending upon the uncertain factors governing the sale of the immovable properties. In this regard I feel that there is one aspect which totally clinches the issue against the petitioners and which is that the petitioners themselves treated non-payment within the time as default inasmuch as they themselves regularly and repeatedly applied for extension of time and with respect to which requests for extension of time various orders were passed from time to time viz on 25.10.07 in Bail Application No.2339/2007 of Justice V.B. Gupta of this Court, an order dated 14.12.07 passed in LA. No.5743/07 in O.M.P. No.291/06 by Justice Aruna Suresh of this Court and the order dated 3.1.08 passed by Justice Muralidhar in Bail Application No.2339/07, and which are some of the orders among others. If the contention of the petitioner was correct that it was only after sale of the properties would the issue of

Page 26

default arise, then, there was no reason why the petitioners applied and sought for repeated extensions of time. The petitioners, therefore, themselves have understood and acted upon the settlement in that the amounts became payable in terms of the time schedule fixed and which was not relatable to the sale of the immovable properties. How the parties act pursuant to a settlement is very much a factor for interpreting the settlement and so was held by the Supreme Court in the judgment reported as Godhara Electricity Company Co. Ltd Vs. State of Gujarat (1975) 1 SCC 199. This objection that defendants have not been committed default is therefore rejected."

¶30On a plain construction of the contract –upon a conjoint reading of Clause 2 and Clause 6 of the settlement dated 03.05.2007-it can be seen that ` 5 crores were to be paid within 30 days from the date of release order of property No E-19, East of Kailash by Court. It doesn't contemplate in any manner that ` 5 crores were to be paid within 30 days from the sale of the property. Clause 2 contemplates- ` 5 crores shall be paid within 30 days from the date permission is granted by the court for sale of property. Clause 6 speaks of the parties moving a joint application for lifting of injunction order and then it provides that after obtaining orders from the court payment of ` 5 crore shall be made to NAFED immediately not exceeding 30 days. The terms of the settlement are unambiguous and forthright about payment and the time schedule. Parties also understood these conditions in this manner which is why after release of the property no. E-19, East of Kailash, New Delhi-110065, the appellants had been moving applications for extension of time for payment of ` 5 crores. No other interpretation can be given to the payment schedule. Also Clause 4 required the

Page 27

balance principal amount of ` 18 crores to be paid after 90 days in three equal monthly installments of ` 6 crore each. This payment is not connected to sale/mortgage of any property and the amount became payable within 90 days of order of release of East of Kailash property which apparently was not done. It is apparent that the appellants had not observed their payment schedule and had not made any payment within the timeframe agreed upon by them.

¶31The appellants' next contention was that the settlement deed could not have been modified by the order of the Court dated

04.04.2008 passed in W.P.(Criminal) No. 461/2007 and the observation of learned Arbitrator and the Single Judge that the petitioner had agreed and had never challenged to this modification is wrong. This court notices that the arbitral tribunal, in the award, answered the issue in these terms: "After the parties settled the disputes and differences, as incorporated in Settlement deed dated 3rd May, 2007, there have been further developments as well. Due to those developments the parties have mutually agreed for change/modification in some of the terms of settlement in the matter of liquidating their liability. Instead of the respondents themselves selling their properties or raising further loan against their properties, they agreed to the sale of the properties by NAFED through public auction, This will be evident from some of the orders of' the courts and the undertakings filed by the respondents in court proceedings by filing affidavits. This further development, modifying/altering some of the terms of settlement deserve to be noticed: When the respondents could not generate funds by sale of the property, as agreed by them and failed .to adhere to the terms of settlement by not making payment of

Page 28

the due amount, within the stipulated period, as agreed, various orders came to be passed from time to time granting further time to the Respondents on their undertaking. Orders passed on 25th October, 2007 in Bail Application No.2339 of 2007 by Justice V.B. Gupta; on. 14th December, 2007 in lA N.0.5743 of 2007 in OMP No.291 of 2006 by Justice Aruna Suresh; on 3rd January, 2008 by Justice S. Murlidhar-in Bail Application No,2339 of,2007 are some of the orders, When despite these orders and undertakings the Respondents were unable to discharge their obligation under the Settlement by raising sufficient amount to fulfill their obligation they agreed for sale of the properties by NAFED by public auction which, were mortgaged/pledged and / or attached. Order passed on 24th March, 2008 in Writ Petition (Criminal) No.785 of 2007 by Justice S.L. Bhayana is relevant on this aspect, which reads: "24.03.2008. Learned, counsel for-the petitioners states that he is ready for the auction of the properties which are attached/ mortgaged with the NAFED/respondent No.2 and also states-that the NAFED will be at liberty to go ahead for auction of the properties. Learned counsel for the respondent NAFED states that there are various owners of the properties attached and mortgaged with the NAFED. Learned counsel for the petitioners is directed to file affidavits of all the property owners giving consent to the sale of the properties so-that there is no obstruction in the auction of the properties. Learned counsel for the petitioners undertakes that the petitioners shall file the requisite affidavits with advance copy to the other side within two days. The respondents/ State shall verify the same before the next date of hearing so that NAFED can go -ahead with the sale of the properties. Interim order to continue till the next date of hearing. In case affidavits are not filed before the next date, the; interim order shall be vacated and the protection shall be withdrawn. List on 2nd April 2008.

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As undertaken by the above order dated 24.3.2008 affidavits of respondents were, filed. But the, affidavits were found to be not in order. The same were permitted to be withdrawn and fresh affidavits were directed to be filed by order dated: 2nd April, 2008, which reads "02.04.2008 (WP(Crl.)785/2007) Counsel for the petitioner states that due to some communication gap, the affidavits filed by the petitioners on 26th March, 2008 are not in consonance with the order dated 24th March, 2008 of this Court. He prays that the said affidavits may be ordered to be withdrawn. He seeks some time to file the requisite affidavits as per the order dated 24th March, 2008. The affidavits filed by the petitioners on 26th March, 2008 are ordered to be withdrawn, and the requisite affidavits of various owners whose properties are attached/mortgaged/pledged with respondent no, 2/NAFED India Ltd., stating that, they have no objection if these properties are sold in public auction by respondent no.2 be filed before the next date of hearing." In compliance to the order dated 2nd April, 2008 fresh affidavits were filed, in those affidavits also certain conditions were incorporated by the respondents subject to which the Respondent said that the properties be sold by NAFED by -public auction. The conditions were as regards the minimum amount at which the properties may be sold. Such conditions incorporated in the affidavits were permitted to be withdrawn. The Court on 4th April, 2008 recorded the statements of each and every deponent who had filed affidavit. Similar statements were made by each deponent. One of the statements is as follows: Statement of Mr. Rajat .Khanna, s/o Shri Pradeep Khanna, R/0 E-18, East of Kailash, New Delhi on S.A; I have no, objection if the properties mentioned in the affidavits filed by me and other petitioners are sold by way of public auction at the market value. I withdraw all the conditions put in the affidavit regarding the market value and valuation given by me and I further undertake

Page 30

not to interfere/ create obstructions in the sale of the properties and will hand over the original title deeds of the properties to the Court Observer appointed by the Court. I undertake-to allow inspection of the properties to the interested bidders/applicants who wont to buy the properties. I also undertake to hand over the vacant and peaceful possession of the properties to the successful bidders/buyers. I further undertake that there Is no third part in possession of the property and I will .not create any third party interest in the properties. I undertake that I shall be bound by the settlement. After recording the statements the following order was passed by Justice S.L.Bhayana on 4.4.2008, which reads as under: "04.04.2008 Learned counsel for the petitioner has filed the affidavits of the petitioners before Court. Let the same be placed on record. Separate statements of the petitioners have been recorded wherein they have withdrawn the conditions mentioned in the affidavits. The, petitioners have no objection if the properties are sold in the public auction. They also pray that a Court Observer be appointed to oversee the entire sale of properties by public auction. The public auction of the properties be done in a very transparent manner. I hereby appoint Ms. Justice Sharda Aggarwal, a retired Judge of this Court, as a Court Observer to oversee the public auction of the properties and submit the report to this Court in the first week of July 2008. Her fee is fixed at Rs.50,000/- to be paid equally by both the parties. Respondent No.2 NAFED is directed to appoint government approved auctioneer who shall value the property and shall give the advertisement of the auction of the properties at least in two national daily newspapers in consultation with the Court Observer. The Public Auctioneer may be appointed in consultation with the Court Observer. Interim orders to continue till the next date of hearing.

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From the above narration it stand established that on the undertakings given by each and every effective party, namely, Mr. Sandeep Khanna, Mr. Rajesh Khanna, Mr. Kamal Khanna, Mr. Ramesh Khanna, Mr. Pradeep Khanna, Mr. Rajat Khanna, Kripa Overseas and Rital Impex the owners of the properties an order was passed for sale of the properties by way of public auction at market value. The statements coupled with the affidavits make it clear that the respondents as well as Kripa Overseas and Rital Impex slightly agreed for medication in the terms of settlement only as regards the method and manner in which they had to discharge their liabilities of payment of principal and interest. Instead of selling the property themselves; they agreed to have the properties sold by way of public auction at market value for which purpose Ms. Justice Sharda Aggarwal was appointed as the Court Commissioner. None of the parties has before me questioned the legality and validity of the settlement arrived at, as incorporated in settlement deed dated

3.5,2007. None of the parties has questioned the legality and validity of the modifications/alterations to the said settlement as regards the manner of realisation of the outstanding amount by sale of properties by way of public auction at market value. Rather the respondents have given undertaking to that effect and they are bound by their undertakings. It is settled position in law that the parties to an agreement may vary some of the terms by a subsequent agreement, Mere alteration or modification of the terms of the contract are not enough, the modification must be read into and become a part of the original contract. The original terms continue to be part of the contract and are not rescinded or superseded except in so far as they are inconsistent with the modifications. The consideration for the variation, if it has to be found, lies in the mutual abandonment of existing rights, or conferring new benefits by each party on the other; or in the assumption of additional obligations or incurring

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additional liabilities or increased detriment. The courts have also recognized a 'practical benefit' arising-to a party undertaking an additional detriment, as sufficient consideration. Thus, the modifications, as incorporated in the order dated 4th April, 2008 became integral part of the settlement deed dated 3.5.2007 with consent of the parties and none of them has challenged the same before me. This modification was also acted upon when the Court observer had one of the properties, i.e., E-16/B1, Mohan Cooperative Industrial Area, New Delhi/put to public auction but the sale could not be confirmed and it became the subject matter of writ petition. Only 25% of the bid amount was deposited which is lying deposited with the Registrar of the High Court. I have been informed in an application filed before me by M/s. Sikka Promoters Pvt. Ltd. that they have withdrawn the writ petition and the Court has directed for fresh auction of the property with liberty to M/s. Sikka Promoters Pvt. Ltd. to participate in the said auction."

¶32The Single judge affirmed those findings and held as under-- "11. The second contention which was raised was that the Learned Arbitrator wrongly held that the order of

04.04.2008 passed in the criminal proceedings cannot be said to have modified the terms of the settlement dated

03.05.07. Related with this plea it was further contended that the Arbitrator has wrongly recorded that none of the parties have challenged the fact that the order dated

04.04.2008 is binding on the parties. So far as the latter aspect of the statement of fact recorded in the Award that the parties have not challenged the validity of the order dated 04.04.2008, I feel that the said statement is clearly binding on the petitioner and the other related parties for the reason that the Award has been passed way back on

24.04.09 and copy of which Award was delivered to the parties on the same date, and, if the Award had wrongly recorded a fact that the parties did not challenge the order

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dated 04.04.08, then, it was incumbent upon the affected parties to immediately approach the Arbitrator seeking correction of the Award to that extent as soon as possible after the copy of the Award was received by them in view of the decision of the Supreme Court reported as State of Maharashtra Vs. Ramdas Shrinivas Nayak (1982) 2 SCC

¶483Admittedly this has not been done even till date and consequently this contention is clearly mala fide and misconceived. In any case on merits too, this argument does not lie in the mouth of the petitioner because not only affidavits were filed by all the parties in the Criminal Writ Petitions, undertakings were also filed and the parties have in fact acted in furtherance of the order dated 04.04.08 passed in the Criminal Writ Petitions, and therefore, I am unable to understand as to how such a contention can even be raised by the petitioner. The order dated 4.4.2008 passed in the Criminal Writ Petition is therefore final as none of the parties had ever challenged the same. This objection therefore also fails and is rejected."

¶33At no stage did the appellants challenge the order dated

04.04.2008 in the criminal proceedings. Even otherwise, the order does not in any way alter the terms of the Contract/Settlement but only acknowledges the mode of liquidation of settlement amount as agreed upon by parties before it. The matter was sent to the arbitrator for passing of an award in terms of the settlement vide order, dated

24.04.2008 of this court. The order records as under: "It is a joint move by the parties to have a common Arbitrator. Having consideration, the material on record and the facts taken into consideration, the parties now have a mutually agreeable settlement, which would bind the parties in OMP No.291/2006 as well as in OMP No.595/2006, the court is of the opinion that, in the interest of justice, a common award

Page 34

as understood in law, to enable the parties the benefits of their compromise, should be made."

¶34The Arbitrator was required to pass an award in terms of settlement – and as understood in law, to ensure that the award should enable the parties, the benefit of their compromise. It was in view of these specific directions to the Arbitrator that the award incorporated the subsequent events and directions of the various courts passed on the basis of submissions of the parties and the affidavits furnished and also considered the un-challenged order of this court dated 04.04.2008 to incorporate the agreed method of liquidation of the properties secured by the appellants under the settlement and which had been ratified by all the persons, who had interest in those properties and who also became parties by moving application in OMP No.291/06. The award thus does not suffer from any infirmity on this count and thus no fault can be found with impugned order upholding the order of arbitrator on this count.

¶35In the settlement dated 03.05.2007, the appellants had acknowledged their liability to the tune of ` 43.21/- crores and agreed to discharge the said liability in a time bound manner. To ensure the implementation of their undertaking, in time bound manner, they had furnished securities and made the guarantors parties to the proceedings. Since the petitioners had failed to honor the settlement, recovery began by sale of the properties by public auction under the supervision of the court observer. It is clear that in fact there was no modification of settlement rather in W.P.(Crl) No. 461/2007, the appellants had agreed for the disposal of the securities and of the properties attached by the

Page 35

Court under Section 9 proceedings, by way of public auction. The settlement remained intact which was for payment of ` 43.21 crores within 180 days and in case of default of discharge of liability within said period, liability to pay the default interest at the rate of Rs. 15%. Also Under Section 31 of Arbitration and Conciliation Act, Court is empowered to award interest on the awarded amount. The Tribunal passed its award in terms of the settlement between the parties and had also taken note of the subsequent developments pursuant to settlement, till the date of the award. From this it is apparent that the award correctly appreciated the facts and circumstances of the case. It cannot therefore, be termed as against public policy. Nor is there anything in the award, which shocks the conscience of the Court. There is no patent illegality in the award and therefore the finding of the learned Single Judge in no way suffers with any illegality or infirmity.

¶36NAFED had urged that the petition under sec.34 of the Act was barred by limitation as it was filed on expiry of 120 days from award and was liable to be dismissed on this count itself. The limitation for filing a petition under is 120 days and it has to be strictly adhered to and no condonation of delay is permissible since provisions of Limitation Act are not applicable to such proceedings. It has been so held by Supreme Court in Union of India Vs. M/s Popular Construction Co., AIR 2001 SC 4010: "15. Furthermore, section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award "in accordance with" sub Section 2 and sub Section 3. Sub Section 2 relates to grounds for setting aside an award and

Page 36

is not relevant for our purposes. But an application filed beyond the period mentioned in Section 34, sub-section (3) would not be an application "in accordance with" that sub section. Consequently by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasized by the provisions of Section 36 which provide that "where the time for making an application to set aside the arbitral award under Section 34 has expired...the award shall be enforced and the Code of Civil Procedure 1908 in the same manner as if it were a decree of a court." This is a significant departure from the provisions of the Arbitration Act, 1940. Under the 1940 Act, after the time to set aside the award expired, the court was required to "proceed to pronounce judgment according to the award and upon the judgment so pronounced a decree shall follow". Now the consequence of the time expiring under Section 34 of the 1996 Act is that the award becomes immediately enforceable without any further act of the Court. If there were any residual doubt on the interpretation of the language used in Section 34, the scheme of the 1996 Act would resolve the issue in favour of curtailment of the Court's powers by the exclusion of the operation of Section 5 of the Limitation Act."

¶37In this case, the award was passed on 24.04.2009 and parties received the copies on same day (which is apparent from their signatures on the award) and the Petition under Section 34 was filed on

24.11.2009. The Petition was thus filed beyond the period of limitation prescribed under Section 34(3) of Arbitration and Conciliation Act. Therefore it was liable to be dismissed for this reason.

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¶38For the foregoing reasons, there is no merit in the present appeals. FAO (OS) 93/2010 and FAO (OS) 317/2010 stands dismissed with no order as to costs.

DEEPA SHARMA (JUDGE)

S. RAVINDRA BHAT (JUDGE)

AUGUST 01, 2016 sapna

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 12.05.2016 % Decided on: 01.08.2016 + FAO (OS) 93/2010 RAJESH KHANNA ..... Appellant Through: Mr. Divyanshu Goyal with Ms. Swati Jain, Advocate. versus NATIONAL AGRICULTURAL CO-OPERATIVE MARKETING FEDERATION OF INDIA LTD .... Respondent Through: Mr. A K Thakur, Mr. R K Mishra and Ms. Rajeshwari Jha, Advocate. and + FAO (OS) 317/2010 SANDEEP KHANNA ..... Appellant Through: Mr. Mukesh Anand, Advocate. versus NATIONAL AGRICULTURAL CO-OPERATIVE MARKETING FEDERATION OF INDIA LTD .... Respondent Through: Mr. A K Thakur, Mr. R K Mishra and Ms. Rajeshwari Jha, Advocate. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA HON'BLE MS. JUSTICE DEEPA SHARMA (JUDGMENT) 1. The appellants challenge the order of a learned Single Judge dated 04.12.2009 (impugned order) which rejected their objections Page 2 under Section 34 of Arbitration and Conciliation Act (OMP No. 693/2009 and OMP No. 694/2009) to the award dated 24.04.2009. 2. The brief facts of the case are that the appellants and National Agricultural Co-operative Marketing Federation of India Ltd. (NAFED), (a Cooperative Society duly registered under the Multiple State Cooperative Societies Act) entered into agreements (hereafter "MOUs"), pursuant to which ` 75 crores were advanced by the NAFED to M/s Rital Impex and ` 10 crores, to M/s Kripa Overseas. Certain Disputes arose between the parties under both the MOU's. 3. NAFED filed an application under Section 9 (OMP No. 291/2006) and by order dated 06.07.2006 immovable properties were attached. When NAFED appointed the arbitrator under the MOU, M/s Rital Impex filed an application, (AA No. 271/2006, under Section 11) in the court for appointment of an Arbitrator. In those proceedings, Justice Devender Gupta, a retired Judge of this Court, was appointed as an Arbitrator to adjudicate upon the dispute between the parties. NAFED claimed ` 50 crores; M/s Rital Impex counter claimed ` 65 crores towards loss and damages suffered by it. 4. Another application, AA No. 68/2007 was filed by NAFED against Kripa overseas and by order dated 20.03.2007, Mr. Justice D.P. Wadhwa (Retd.) was appointed as a sole Arbitrator. NAFED complained to the police, which led to registration of FIR Nos. 474/2006 dated 26.08.2006 at Police Station Srinivaspuri for offences punishable under Sections 406, 420 read with Section 121-B of IPC against M/S Kripa Overseas, Sandeep Khanna and others and registration of FIR No. 223/2007 dated 18.05.2007 with Police Station Page 3 Srinivaspuri against Sh. Rajesh Khanna, proprietor of Rital Impex Limited for offences punishable under Sections 406, 420, 467, 468, 471 read with Section 120-B of the Indian Penal Code. 5. Negotiations ensued between the parties and all three, NAFED, M/s Rital Impex and M/s Kripa Overseas entered into a settlement dated 03.05.2007. Under the terms of settlement, besides Sh. Rajesh Khanna and Sh. Sandeep Khanna, proprietors of M/s Rital Impex and M/s Kripa Overseas, other family members and promoters/Directors of Rital Impex Limited, who owned/possessed the properties, also acknowledged and admitted and ratified the terms of settlement and agreed to be bound by the same. The settlement was produced before the Court of Sh. Vinod Kumar, Additional Sessions Judge, wherein the bail application in FIR No. 474/2006 was pending. The parties made a statement before the Court on 14.05.2007 acknowledging the settlement. Since the other family members of these two proprietorship concerns were not the parties of the MOU, they moved CM 5746/ 2007 for impleadment in OMP 291/ 2006. The learned single judge, by order dated 16.05.2007 allowed the impleadment of those individuals as parties and in the same order on another application CM 5743/ 2007 (for taking on record the settlement) observed that in view of the settlement between the parties, the proceedings before the Arbitrator had become redundant. The said application under